The v-myb oncogene of avian myeloblastosis virus causes acute monoblastic leukemia in vivo and transforms myelomonocytic cells in culture. Retinoids are potent regulators of proliferation and differentiation in various cell types, and they can initiate differentiation in certain types of leukemic cells. However, the BM2 v-myb-transformed chicken monoblastic cell line is resistant to retinoic acid treatment. We found that overexpression of the retinoid X receptor confers sensitivity of BM2 cells to retinoic acid, resulting in induction of growth arrest and terminal differentiation. In contrast, the frequency of apoptosis was not affected by the retinoid X receptor in this cell type. We also demonstrated that suppression of transformation by v-Myb results from the negative effect of retinoid X receptor on v-Myb transactivation function, similar to that previously described for the retinoic acid receptor. The retinoid X receptor-induced inhibition of transactivation by v-Myb seems to be enhanced by a cell type-specific factor(s), which is not required by retinoic acid receptor.