We have investigated the effects of acute promyelocytic leukemia (APL) fusion gene NPM-RARalpha on the function of PPARgamma using the monoblastic cell line U937. U937 cells were transduced using a retrovirus carrying NPM-RARalpha. While treatment with the synthetic PPARgamma ligand troglitazone (TG) had no effect on the viability of U937 cells, TG treatment of U937/NPM-RARalpha cells resulted in a dramatic decrease in cell viability, dependent upon both the concentration of TG and the level of expression of NPM-RARalpha. Analysis of the cell cycle profile and flow cytometry with annexin V confirmed that these effects of TG were due to induction of apoptosis. Induction of apoptosis was accompanied by caspase-8 and caspase-9 activation, and could be blocked by treatment with the caspase inhibitor Z-VAD-FMK. Cotreatment of U937/NPM-RARalpha cells with all-trans retinoic acid (atRA) abrogated the induction of apoptosis by TG. Induction of apoptosis was seen also in the PML-RARalpha-expressing APL cell line NB4, and in several other atRA-sensitive leukemia cell lines, demonstrating that this effect is limited neither to the monocyte lineage nor to the rare NPM-RARalpha fusion variant. RXRalpha/NPM-RARalpha heterodimers were found to interact directly with a PPARgamma-responsive element in vitro. We conclude that in the presence of X-RARalpha, TG induces cell death due to apoptosis via the caspase pathway. These observations suggest the investigation of PPARgamma ligands as therapeutic agents in acute leukemia.