The standard treatment of patients with acute myeloid leukemia (AML) has depended on the elimination of the leukemic clone with cytotoxic myeloablation. Differentiation therapy is receiving increasing attention due to the remarkable activity of a vitamin A derivative, all-trans retinoic acid (ATRA), in patients with acute promyelocytic leukemia (APL). The majority of patients treated have achieved complete remission and with rapid resolution of the life-threatening bleeding diathesis. Phase II studies with ATRA in APL indicate certain limitations in the therapeutic use of retinoic acid. Patients achieving complete remission with ATRA alone require postremission chemotherapy, once remission is achieved, to extend remission. The results of differentiating therapy in APL patients has encouraged the use of differentiating therapy in patients with non-M3 AML. A number of areas await research, such as the need to develop ways to overcome acquired retinoic resistance and the development of cytochrome P450 inhibitors. Other novel retinoids, such as 9-cis-retinoic acid, may be even more effective than ATRA in APL. Additional important areas of research involve studying combinations of retinoids and other putative differentiating agents, and identifying different selected treatments targeted at specific molecular defects.