PML and Tif1a are fused to RARA and Braf, respectively, resulting in the production of PML-RAR alpha and Tif1 alpha-B-Raf (T18) oncoproteins. Here we show that PML, Tif1 alpha and RXR alpha/RAR alpha function together in a transcription complex that is dependent on retinoic acid (RA). We found that PML acts as a ligand-dependent coactivator of RXR alpha/RAR alpha. PML interacts with Tif1 alpha and CBP. In Pml(-/-) cells, the RA-dependent induction of genes such as RARB2 and the ability of Tif1 alpha and CBP to act as transcriptional coactivators on RA are impaired. We show that both PML and Tif1 alpha are growth suppressors required for the growth-inhibitory activity of RA. T18, similar to PML-RAR alpha, disrupts the RA-dependent activity of this complex in a dominant-negative manner resulting in a growth advantage. Our data define a new pathway for the control of cell growth and tumorigenesis, and provide a new model for the pathogenesis of acute promyelocytic leukaemia (APL).