Epithelial cells from non-cancerous mammary tissue in response to exposure to chemical carcinogens or transfection with oncogenes exhibit hyperproliferation and hyperplasia prior to the development of cancer. Aberrant proliferation may, therefore, represent a modifiable early occurring preneoplastic event that is susceptible to chemoprevention of carcinogenesis. The synthetic retinoid N-(4-hydroxyphenyl)retinamide (HPR), has exhibited preventive efficacy in several in vitro and in vivo breast cancer models, and represents a promising chemopreventive compound for clinical trials. Clinically relevant biochemical and cellular mechanisms responsible for the chemopreventive effects of HPR, however, are not fully understood. Experiments were performed on preneoplastic human mammary epithelial 184-B5/HER cells derived from reduction mammoplasty and initiated for tumorigenic transformation by overexpression of HER-2/neu oncogene, to examine whether HPR inhibits aberrant proliferation of these cells and to identify the possible mechanism(s) responsible for the inhibitory effects of HPR. Continuous 7-day treatment with HPR produced a dose-dependent, reversible growth inhibition. Long-term (21 day) treatment of 184-B5/HER cells with HPR inhibited anchorage-dependent colony formation by approximately 80% (P < 0.01) relative to that observed in the solvent control. A 24 h treatment with cytostatic 400 nM HPR produced a 25% increase (P = 0.01) in G0/G1 phase, and a 36% decrease (P = 0.01) in S phase of the cell cycle. HPR treatment also induced a 10-fold increase (P = 0.02) in the sub-G0 (apoptotic) peak that was down-regulated in the presence of the antioxidant N-acetyl-L-cysteine. Treatment with HPR resulted in a 30% reduction of cellular immunoreactivity to tyrosine kinase, whereas immunoreactivity to p185HER remained essentially unaltered. HPR exposure resulted in time-dependent increase in cellular metabolism of the retinoid as evidenced by increased formation of the inert metabolite N-(4-methoxyphenyl)-retinamide (MPR) and progressive increase in apoptosis. Thus, HPR-induced inhibition of aberrant proliferation may be caused, in part, by its ability to inhibit HER-2/neu-mediated proliferative signal transduction, retard cell cycle progression and upregulate cellular apoptosis.