A fusion between the promyelocytic leukemia (PML) protein and the retinoic acid receptor-alpha (RARalpha) results in the transforming protein of acute promyelocytic leukemia, PML-RARalpha. PML has growth-suppressive properties and is localized within distinct nuclear structures referred to as nuclear bodies. PML participates in numerous cellular functions, including transcriptional activation, apoptosis, and transcriptional repression, whereas PML-RARalpha blocks these functions. However, the role played by PML-RARalpha in leukemogenesis remains unclear. Here we report that PML is required for transcriptional repression mediated by the tumor suppressor Rb. Rb interacts with the histone decaetylase (HDAC) complex containing co-repressors and represses the transcription of the E2F target genes. Overexpression of PML enhanced Rb-mediated repression. The degree of Rb-mediated repression was weakened by injecting anti-PML antibodies and was lower in Pml-deficient mouse embryonic fibroblasts. PML-RARalpha inhibited Rb-mediated repression, and two co-repressor-interacting sites on the PML-RARalpha molecule were required for this activity. Furthermore, PML-RARalpha blocked the interaction between Rb and HDAC. Thus, aberrant binding of PML-RARalpha to co-repressor-HDAC complexes may inhibit their association with Rb, resulting in the abrogation of Rb activity. Thus, the disruption of Rb-mediated repression may be a contributory factor in leukemogenesis.