Rcd1, initially identified as a factor essential for the commitment to nitrogen starvation-invoked differentiation in fission yeast, is one of the most conserved proteins found across eukaryotes, and its mammalian homolog is expressed in a variety of differentiating tissues. Here we show that mammalian Rcd1 is a novel transcriptional cofactor and is critically involved in the commitment step in the retinoic acid-induced differentiation of F9 mouse teratocarcinoma cells, at least in part, via forming complexes with retinoic acid receptor and activation transcription factor-2 (ATF-2). In addition, antisense oligonucleotide treatment of embryonic mouse lung explants suggests that Rcd1 also plays a role in retinoic acid-controlled lung development.