The chromosome breakpoints of the acute promyelocytic leukemia (APL)-specific 15;17 translocation have recently been isolated. They are localized on a previously unknown gene, PML, on chromosome 15 and in the gene that encodes the alpha retinoic acid receptor (RAR alpha) on 17. The translocation, which is balanced and reciprocal, leads to the formation of two fusion genes, PML/RAR alpha and RAR alpha/PML. Both are expressed in APL. The PML/RAR alpha gene codes for two abnormal proteins: the PML/RAR alpha fusion protein and an abnormal PML protein, the RAR alpha/PML gene encodes the RAR alpha/PML fusion protein. Experiments to investigate the biological activity of the abnormal translocation products are in progress. Preliminary results suggest that the PML/RAR alpha fusion protein is responsible for two important properties of the APL phenotype: the differentiation block characteristic of the leukemic blasts and the high sensitivity of the blasts to the differentiative action of retinoic acid (RA) both in vivo and in vitro. The mechanism through which PML/RAR alpha exerts its biological function remains unknown. However, there is accumulating evidence that it acts by interfering with normal endogenous pathways of both RAR alpha and PML. The RAR alpha receptor is implicated in regulating the myeloid differentiation induced by RA. Although the physiological function of PML is not known, it is probably a transcription factor. Definition of the molecular architecture of the t(15;17) has furnished further tools for: (1) molecular diagnosis of APL and (2) highly sensitive evaluation of the neoplastic clone during antileukaemic therapy. The molecular identification of residual APL disease after anti-leukaemia therapy allows patients at risk of relapse to be identified.