Acute promyelocytic leukemia is characterized by a specific t(15;17) chromosomal translocation and a particular sensitivity to retinoic acid. The translocation fuses the PML gene to the retinoic acid receptor alpha (RAR alpha) gene resulting in the production of a PML-RAR alpha fusion protein. The hybrid molecule retains most of the functional domains of both native products, PML and RAR alpha, but it has novel features. Its cellular distribution is completely reorganized when compared to that of PML: the hybrid is found in multiple small nuclear substructures and upon retinoic acid treatment, it goes back to the normal PML localization, that is in typical well organized nuclear bodies. PML-RAR alpha also acquires novel transcriptional properties if compared to RAR alpha, it does so either by direct binding to target gene regulatory sequences or by protein interaction with cofactors. Expression of PML-RAR alpha in HL60 or U937 cell has been shown to block their maturation while it can force their differentiation at high doses of retinoic acid. Different mechanisms are proposed to explain how PML-RAR alpha blocks differentiation and how this may be reversed by retinoic acid. A likely hypothesis might be the delocalization of critical cofactors into the aberrant PML-RAR alpha substructures while the therapeutic effect of retinoic acid would be correlated to its capacity to restore a normal nuclear organization.