The nuclear receptor ligand all-trans retinoic acid (ATRA) causes dramatic terminal differentiation of acute promyelocytic leukemia (APL) cells in vitro and in patients, but it is less active in other malignancies. However, downstream mediators of the effects of ATRA are not well understood. We used a cDNA microarray to search for ATRA-regulated genes in the APL cell line NB4 and found that ATRA regulated several members of the tumor necrosis factor (TNF) pathway. Here we show that TNF can synergize with ATRA to induce differentiation, showing monocytic characteristics more typical of differentiation mediated by TNF than by ATRA. ATRA and TNF can also induce differentiation of the non-APL cell line U937. Underlying this response was an increase in TNF-induced nuclear factor-kappaB (NF-kappaB) DNA binding within 2 hours in the presence of ATRA and activation of NF-kappaB DNA binding and transcriptional activity in response to ATRA alone within 48 hours of ATRA treatment. Furthermore, we found a synergistic induction of the NF-kappaB target genes BCL-3, Dif-2, and TNF receptor 2 (TNFR2) in response to the combination of TNF and ATRA. These genes have been previously shown to play a role in TNF signaling, and amplification of such genes may represent a mechanism whereby TNF and ATRA can act synergistically. We propose that ATRA can prime cancer cells for differentiation triggered by TNF and suggest that targeting the TNF pathway in combination with ATRA may represent a novel route to treat leukemias.