Several reports have appeared on the efficacy of topically applied 0.01% or 0.1% all-trans retinoic acid (0.04–0.4 millimolar) for treatment of xerophthalmia, conjunctival squamous metaplasia, and corneal epithelial erosions in humans and animals. An observation common to many of these studies is the occurrence of an adverse reaction to retinoic acid in the form of lid margin hyperemia and blepharoconjunctivitis. Since retinoic acid is biologically active at micro-molar to nanomolar concentrations, it may be possible to reduce side effects while maintaining therapeutic effectiveness by reducing the retinoic acid concentration in ophthalmic formulations. In the present study, topical 0.005% retinoic acid in petrolatum ointment reversed corneal keratinization in xerophthalmic, vitamin A-deficient rabbits in 3–4 days while 0.0005% (2 micromolar) retinoic acid ointment was effective in 4–6 days. Further clinical trials of topical retinoic acid for treatment of ocular surface disease should be conducted using micromolar concentrations of retinoic acid which are expected to maintain a therapeutic effect while reducing adverse reactions.