In neuroblastoma cells, retinoic acid induces cell cycle arrest and differentiation through degradation of the F-box protein, Skp2, and stabilization of cyclin-dependent kinase inhibitor, p27. However, the mechanism responsible for retinoic acid-mediated Skp2 destabilization is unknown. Since Skp2 is degraded by anaphase-promoting complex (APC)(Cdh1), here we studied whether retinoic acid promotes differentiation of human SH-SY5Y neuroblastoma cells by modulating Cdh1. We found that retinoic acid induced the nuclear accumulation of Cdh1 that paralleled Skp2 destabilization and p27 accumulation. The mRNA and protein abundance of Rae1-a nuclear export factor that limits APC(Cdh1) activity in mitosis-decreased upon retinoic acid-induced inhibition of neuroblastoma cell proliferation. Furthermore, either Rae1 overexpression or Cdh1 inhibition promoted Skp2 accumulation, p27 destabilization and prevented retinoic acid-induced cell cycle arrest and differentiation. Conversely, inhibition of Rae1 accelerated retinoic acid-induced differentiation. Thus, retinoic acid downregulates Rae1, hence facilitating APC(Cdh1)-mediated Skp2 degradation leading to the arrest of cell cycle progression and neuroblastoma differentiation.