Opposing functions like oncogene and tumor suppressions have been established for c-Myc and promyelocytic leukemia (PML) protein, respectively. Myc is known to inhibit differentiation of hematopoietic precursor cells, and here we report that PML promotes cell differentiation. We further demonstrate that PML and Myc form a complex in vivo. The interaction of the two proteins leads to the destabilization of Myc in a manner dependent on the really interesting new gene (RING) domain of PML. Although several PML isoforms are able to interact with Myc, the ability to destabilize Myc is specific for PML4. Importantly, the PML-induced destabilization resulted in a reduction of promoter-bound Myc on Myc-repressed genes. Thereby, PML induced the re-activation of Myc-repressed target genes including the tumor suppressive genes of the cell cycle inhibitors cdkn1a/p21 and cdkn2b/p15. Together, these results establish PML-mediated destabilization of Myc and the derepression of cell cycle inhibitor genes as an important regulatory mechanism that allows cell differentiation and prevents aberrant proliferation driven by uncontrolled Myc activity.