Acute promyelocytic leukemia (APL) is characterized by a block in differentiation of hematopoietic cells at the promyelocytic stage of development. This disease is uniquely sensitive to treatment with pharmacological doses of all-trans retinoic acid (ATRA), and the combination of ATRA with chemotherapy has improved the durable disease-free survival in these patients to up to 80%. APL is characterized by chromosomal translocations that lead to the fusion of the retinoic acid receptor-alpha (RARalpha) to various partner genes. RARalpha functions as a ligand-inducible transcription factor and the aberrant RARalpha fusion proteins contribute to leukemic transformation by dominant inhibition of the expression of target genes that are important for cellular differentiation. This may at least in part be explained by an abnormally strong interaction with corepressor proteins leading to deacetylation of DNA and silencing of target genes. Most RARalpha fusion proteins can still be induced to transactivate genes, but only at very high doses of ligand, explaining why pharmacological doses of ATRA are necessary to obtain a therapeutic effect in these patients.