Poor prognosis neuroblastoma (NB) tumors are marked by amplification and overexpression of N-myc. Retinoic acid (RA) decreases N-myc levels and induces cell cycle arrest in vitro and increases event-free survival in advanced stage NB patients. In this study, we investigated the mechanism(s) by which RA regulates cell cycle and how N-myc affects NB cell cycle progression. Constitutive N-myc overexpression stimulates increases in cyclin E-dependent kinase activity and decreases in p27 resulting in increased DNA synthesis. N-myc regulates p27 levels through an increase in targeting of p27 to the proteasome via cyclin E kinase-dependent phosphorylation of p27 and its ubiquitination. N-myc also stimulates an increase in proteasome activity. In RA-treated cells in which N-myc levels decline as p27 levels increase, degradation of p27 is also decreased. However, RA does not affect the activity of proteasome. The decrease in the degradation of p27 in RA-treated cells is due in part to a decrease in the N-myc stimulated phosphorylation of p27. However, RA also decreases Skp2 levels thus impairing the ability of p27 to be ubiquitinated. Thus, RA induces both N-myc-dependent and -independent mechanisms to minimize the degradation of p27 and arrest NB cell growth.