Acute promyelocytic leukemia (APL) is characterized by the translocation, t(15;17) and the expression of a PML/RAR alpha fusion protein that is diagnostic of the disease. There is evidence that PML/RAR alpha protein acts as a dominant negative inhibitor of normal retinoid receptor function and myeloid differentiation. We now show that the PML/RAR alpha fusion product is directly downregulated in response to retinoic acid (tRA) treatment in the human APL cell line, NB4. tRA treatment induces loss of PML/RAR alpha at the protein level but not at the level of mRNA, as determined by Northern blots, by Western blots, and by ligand binding assays and in binding to RA-responsive DNA elements. We present evidence that this regulation is posttranslational. This evidence suggests that tRA induces synthesis of a protein that selectively degrades PML/RAR alpha. We further show that this loss of PML/ RAR-alpha is not limited to the unique APL cell line. NB4, because PML/RAR alpha protein is selectively downregulated by tRA when expressed in the transfected myeloid cell line U937. The loss of PML/RAR alpha may be directly linked to tRA-induced differentiation, because in a retinoid-resistant subclone of NB4, tRA does not decrease PML/RAR alpha protein expression. In NB4 cells, the specific downregulation of the fusion protein decreases the ratio of PML/RAR alpha to wild-type RAR alpha. Because the ratio of expression of PML/RAR alpha to wild-type RAR alpha and PML may be important in maintaining the dominant negative block of myelocytic differentiation, these data suggest a molecular mechanism for restoration by tRA normal myeloid differentiation in APL cells.