Although PML-enforced RARA homodimerization allows PML/RARA to bind DNA independently of its coreceptor RXR, the latter was identified within the PML/RARA complex. We demonstrate that a PML/RARA mutant defective for RXR binding fails to trigger APL development in transgenic mice, although it still transforms primary hematopoietic progenitors ex vivo. RXR enhances PML/RARA binding to DNA and is required for rexinoid-induced APL differentiation. In RA-treated PML/RARA-transformed cells, the absence of RXR binding results in monocytic, rather than granulocytic, differentiation. PML/RARA enhances posttranslational modifications of RXRA, including its sumoylation, suggesting that PML-bound sumoylation enzymes target RXRA and possibly other PML/RARA-bound chromatin proteins, further contributing to deregulated transcription. Thus, unexpectedly, RXR contributes to several critical aspects of in vivo transformation.