Although the role of the classic retinoic acid (RA)-induced genomic pathway in cancer cell differentiation is well recognized, the underlying mechanisms remain to be dissected. Retinoic acid receptor alpha (RARalpha) is a transcription factor activated by RA, and its serine 77 (RARalphaS77) is the main residue phosphorylated by the cyclin-dependent kinase (CDK)-activating kinase (CAK) complex. We report here that in both human myeloid leukemia and mouse embryonic teratocarcinoma stem cells, either RA-suppressed CAK phosphorylation of RARalpha or mutation of RARalphaS77 to alanine (RARalphaS77A) coordinates CAK-dependent G(1) arrest with cancer cell differentiation by transactivating RA-target genes. Both hypophosphorylated RARalpha and RARalphaS77A reduce binding to retinoic acid-responsive elements (RARE) in the promoters of RA-target genes while stimulating gene transcription. The enhanced transactivation and reduced RARalpha-chromatin interaction are accompanied by RARalpha dissociation from the transcriptional repressor N-CoR and are association with the coactivator NCoA-3. Such effects of decreased CAK phosphorylation of RARalphaS77 on mediating RA-dependent transcriptional control of cancer cell differentiation are examined correspondingly in both RA-resistant myeloid leukemia and embryonic teratocarcinoma stem RARalpha(-/-) cells. These studies demonstrate, for the first time, that RA couples G(1) arrest to transcriptional control of cancer cell differentiation by suppressing CAK phosphorylation of RARalpha to release transcriptional repression.-Wang, A., Alimova, I. N., Luo, P. Jong, A., Triche, T. J., Wu, L. Loss of CAK phosphorylation of RARalpha mediates transcriptional control of retinoid-induced cancer cell differentiation.