Nuclear receptors are ligand-modulated transcription factors regulated by interactions with corepressors and coactivators, whose functions are not fully understood. Acute promyelocytic leukemia (APL) is characterized by a translocation, t(15;17), that produces a PML/RARalpha fusion oncoprotein, whose abnormal transcriptional function is successfully targeted by pharmacologic levels of all-trans-retinoic acid (ATRA). Mutations in the ligand-binding domain of PML/RARalpha that confer resistance to ATRA have been studied by expression in nonhematopoietic cells, such as Cos-1. Here, we show that ATRA binding and transcriptional activation by the same PML/RARalpha mutant differ markedly between nonhematopoietic and leukemic cell lines. Differential expression of the corepressor isoform silencing mediator for retinoid and thyroid receptors beta (SMRTbeta) correlates with increased ligand binding and transcription by the mutant PML/RARalpha. Transient and stable overexpression of SMRTbeta in hematopoietic cells that only express SMRTalpha increased ATRA binding, ligand-induced transcription, and ATRA-induced cell differentiation. This effect may not be limited to abnormal nuclear receptors, because overexpression of SMRTbeta increased ATRA-induced binding and transcriptional activation of wild-type receptors PML/RARalpha and RARalpha. Our results suggest a novel role for the SMRTbeta isoform whereby its cell-specific expression may influence the binding and transcriptional capacities of nuclear receptors, thus providing new evidence of distinct functions of corepressor isoforms and adding complexity to transcriptional regulation.