Several phase II clinical studies of all-trans-retinoic acid (ATRA) have been conducted in acute promyelocytic leukemia (APL), an uncommon subtype of acute myeloid leukemia (AML). ATRA has been shown to induce complete remission (CR) in 64% to 96% of patients with APL, and with rapid resolution of the coagulopathy, which is a major cause of early morbidity and mortality. Although CRs induced with ATRA alone are usually not sustained and intensive antileukemic consolidation therapy is required to prolong remission, these findings indicate that a new approach of differentiation therapy is effective in treating patients with APL and may potentially be effective in other malignancies. The presence of the PML/retinoic acid receptor-alpha (PML/RAR-alpha) fusion gene, produced as a result of the unique chromosomal translocation in APL, is a marker of sensitivity to ATRA. Aside from the complications of hyperleukocytosis and the retinoic acid syndrome, ATRA therapy is generally well tolerated. An international study (Intergroup 0129), headed by the Eastern Cooperative Oncology Group, is currently under way to determine further the role of ATRA in the treatment of patients with APL. Given its success in APL, studies of ATRA in other hematologic malignancies are also being conducted. A better understanding of how retinoids modulate carcinogenesis will help determine if the results in APL can be realized in other malignancies treated with ATRA or other retinoids.