Retinoic acid (RA), derived from vitamin A, is a major teratogen, clinically recognized in 1983. Identification of its natural presence in the embryo and dissection of its molecular mechanism of action became possible in the animal model with the advent of molecular biology, starting with the cloning of its nuclear receptor. In normal development, the dose of RA is tightly controlled to regulate organ formation. Its production depends on enzymes, which have a dynamic expression profile during embryonic development. As a small molecule, it diffuses rapidly and acts as a morphogen. Here, we review advances in deciphering how endogenously produced RA provides positional information to cells. We compare three mesodermal tissues, the limb, the somites and the heart, and discuss how RA signalling regulates antero-posterior and left-right patterning. A common principle is the establishment of its spatio-temporal dynamics by positive and negative feedback mechanisms and by antagonistic signalling by FGF. However, the response is cell-specific, pointing to the existence of cofactors and effectors, which are as yet incompletely characterized. This article is part of a discussion meeting issue 'Contemporary morphogenesis'.