Because of their differentiating effects in neoplastic cells in vitro, the use of retinoids in the treatment of various malignant and premalignant conditions is under investigation. To date, signal transduction pathways involved in retinoid-induced differentiation remain poorly understood. Differentiation of HL-60 cells by all-trans-retinoic acid (tRA) is directly mediated by down-regulation of the serine protease myeloblastin (mbn). In this report, we investigate the possibility that the 28-kDa heat shock protein (hsp28), previously linked to differentiation of normal and neoplastic cells including HL-60, may be regulated by mbn. Using NB4 promyelocytic leukemic cells as a differentiative model, we show that tRA induces initial suppression and subsequent up-regulation of hsp28 protein, mirroring tRA-induced changes in mbn protein. The progressive reduction in hsp28 mRNA levels in response to tRA suggests that changes in hsp28 protein levels might be posttranscriptionally mediated, raising the possibility that hsp28 may be targeted by mbn. To address this, we developed an assay using purified mbn and recombinant hsp28 and now show that hsp28 is hydrolyzed by mbn but not its homologue, human neutrophil elastase. Moreover, mbn does not indiscriminately hydrolyze other proteins. Identifying hsp28 as a substrate of mbn strongly suggests that hsp28 may be a key component of the tRA signaling pathway involved in regulating cell differentiation.