Acute promyelocytic leukemia arises following a reciprocal chromosome translocation t(15;17), which generates PML-retinoic acid receptor alpha fusion proteins (PML-RAR alpha). We have shown previously that wild type PML, but not PML-RAR alpha, is covalently modified by the sentrin family of ubiquitin-like proteins (Kamitani, T., Nguyen, H. P., Kito, K., Fukuda-Kamitani, T., and Yeh, E. T. H. (1998) J. Biol. Chem. 273, 3117-3120). To understand the mechanisms underlying the differential sentrinization of PML versus PML-RAR alpha, extensive mutational analysis was carried out to determine which Lys residues are sentrinized, We show that Lys(65) in the RING finger domain, Lys(160) in the B1 Box, and Lys(490) in the nuclear localization signal contributes three major sentrinization sites. The PML mutant with Lys to Arg substitutions in all three sites is expressed normally, but cannot be sentrinized. Furthermore, the triple substitution mutant is localized predominantly to the nucleoplasm, in contrast to wild type PML, which is localized to the nuclear bodies. Thus, sentrinization of PML, in the context of the RING finger and the BI box, regulates nuclear body formation. Furthermore, we showed that sentrinization of PML-RAR alpha could be restored by overexpression of sentrin, but not by retinoic acid treatment. These studies provide novel insight into the pathobiochemistry of acute promyelocytic leukemia and the sentrinization pathway.