Endogenous, nontelomeric reverse transcriptase (RT) is encoded by two classes of repeated elements: retrotransposons and endogenous retroviruses. Expression of RT-coding genes is generally repressed in differentiated nonpathological tissues, yet is active in the mammalian germ line, embryonic tissues and tumor cells. Nevirapine is a non-nucleoside RT inhibitor with a well-characterized inhibitory activity on RT enzymes of retroviral origin. Here, we show that nevirapine is also an effective inhibitor of the endogenous RT in murine and human cell lines. In addition, progenitor and transformed cells undergo a significant reduction in the rate of cell growth upon exposure to nevirapine. This is accompanied by the onset of differentiation, as depicted in F9 and C2C7 progenitor cells cultures in which nevirapine triggers the expression of differentiation-specific markers. Consistent with this, an extensive reprogramming of cell cycle gene expression was depicted in nevirapine-treated F9 cultures. Furthermore, nevirapine exposure rescued the differentiation block present in acute myeloid leukemia (AML) cell lines and primary blasts from two AML patients, as indicated by morphological, functional and immunophenotypic assays. The finding that an RT inhibitor can modulate cell proliferation and differentiation suggests that RT may represent a novel target in the development of therapeutical approaches to neoplasia.