Promyelocytic leukemia zinc finger-retinoic acid receptor a (PLZF-RARalpha), a fusion receptor generated as a result of a variant t(11;17) chromosomal translocation that occurs in a small subset of acute promyelocytic leukemia (APL) patients, has been shown to display a dominant-negative effect against the wild-type RARalpha/retinoid X receptor alpha (RXRalpha). We now show that its N-terminal region (called the POZ-domain), which mediates protein-protein interaction as well as specific nuclear localization of the wild-type PLZF and chimeric PLZF-RARalpha proteins, is primarily responsible for this activity. To further investigate the mechanisms of PLZF-RARalpha action, we have also studied its ligand-receptor, protein-protein, and protein-DNA interaction properties and compared them with those of the promyelocytic leukemia gene (PML)-RARalpha, which is expressed in the majority of APLs as a result of t(15;17) translocation. PLZF-RARalpha and PML-RARalpha have essentially the same ligand-binding affinities and can bind in vitro to retinoic acid response elements (RAREs) as homodimers or heterodimers with RXRalpha. PLZF-RARalpha homodimerization and heterodimerization with RXRalpha were primarily mediated by the POZ-domain and RARalpha sequence, respectively. Despite having identical RARalpha sequences, PLZF-RARalpha and PML-RARalpha homodimers recognized with different affinities distinct RAREs. Furthermore, PLZF-RARalpha could heterodimerize in vitro with the wild-type PLZF, suggesting that it may play a role in leukemogenesis by antagonizing actions of not only the retinoid receptors but also the wild-type PLZF and possibly other POZ-domain-containing regulators. These different protein-protein interactions and the target gene specificities of PLZF-RARalpha and PML-RARalpha may underlie, at least in part, the apparent resistance of APL with t(11;17) to differentiation effects of all-trans-retinoic acid.