The unique t(15;17) of acute promyelocytic leukemia (APL) fuses the PML gene with the retinoic acid receptor alpha (RAR alpha) gene. Although retinoic acid (RA) inhibits cell growth and induces differentiation in human APL cells, resistance to RA develops both in vitro and in patients. We have developed RA-resistant subclones of the human APL cell line, NB4, whose nuclear extracts display altered RA binding. In the RA-resistant subclone, R4, we find an absence of ligand binding of PML-RAR alpha associated with a point mutation changing a leucine to proline in the ligand-binding domain of the fusion PML-RAR alpha protein. In contrast to mutations in RAR alpha found in retinoid-resistant HL60 cells, in this NB4 subclone, the coexpressed RAR alpha remains wild-type. In vitro expression of a cloned PML-RAR alpha with the observed mutation in R4 confirms that this amino acid change causes the loss of ligand binding, but the mutant PML-RAR alpha protein retains the ability to heterodimerize with RXR alpha and thus to bind to retinoid response elements (RAREs). This leads to a dominant negative block of transcription from RAREs that is dose-dependent and not relieved by RA. An unrearranged RAR alpha engineered with this mutation also lost ligand binding and inhibited transcription in a dominant negative manner. We then found that the mutant PML-RAR alpha selectively alters regulation of gene expression in the R4 cell line. R4 cells have lost retinoid-regulation of RXR alpha and RAR beta and the RA-induced loss of PML-RAR alpha protein seen in NB4 cells, but retain retinoid-induction of CD18 and CD38. Thus, the R4 cell line provides data supporting the presence of an RAR alpha-mediated pathway that is independent from gene expression induced or repressed by PML-RAR alpha. The high level of retinoid resistance in vitro and in vivo of cells from some relapsed APL patients suggests similar molecular changes may occur clinically.