Retinoic acid (RA) is capable of inducing the differentiation of various myelomonocytic cell lines. During this differentiation process, the levels of c-myb expression decline, suggesting that the RA receptor (RAR) may act in part by down-regulating this proto-oncogene. We have now investigated whether the RAR can also inhibit the function of Myb proteins themselves. We have found that transcriptional activation of a Myb-responsive reporter gene can be inhibited by RA in a human monocytic cell line. This inhibition could not be overcome by the expression of exogenous Myb. The RAR did not interfere with DNA binding by Myb proteins in vitro, suggesting that the functional inhibition occurs at the level of transcriptional activation. To determine the biological relevance of the inhibition of Myb proteins by the RAR, we have used v-myb-transformed monoblasts. These cells differentiate into macrophages in the presence of phorbol ester (tetradecanoyl phorbol acetate [TPA]) but are normally unresponsive to RA treatment. The introduction of an inducible, exogenous RAR alpha into v-myb-transformed monoblasts permitted an RA-dependent differentiation into macrophage-like cells similar to those induced by TPA. These results demonstrate that transformation by v-myb is recessive to RAR alpha and imply that many types of non-RA-responsive leukemia cells may become responsive following the introduction of the RAR.