Acute myeloid leukemia (AML) is characterized by a differentiation block leading to accumulation of immature cells. Chromosomal translocations in AML affect transcription factors that are involved in regulation of myeloid differentiation. Aberrant expression of these factors interferes with differentiation events and has a role in the pathogenesis of AML through superactivation or (dominant negative) repression of genes regulating proliferation and differentiation or by interference with assembly of the transcription complex for these genes. The maturation arrest can be reversed by certain agents as judged by results from investigations of myeloid leukemic cell lines and from treatment of acute promyelocytic leukemia (APL) patients with all-trans retinoic acid. Inactivation of the p53 and retinoblastoma (Rb) tumor suppressor genes is also associated with the pathogenesis of leukemia through effects on the cell cycle, and manipulation of these genes can affect differentiation of AML cells. With differentiation therapy, when successful as in APL, the leukemic cell mass is reduced to allow restoration of normal hematopoiesis and clinical remission, but the disease is not cured. However, initial reduction of the cell mass by maturation can increase the probability for cure with chemotherapy. Overexpression of suppressor genes may increase the probability for differentiation. Most probably, particular molecular defects of subgroups of AML have to be explored to find optimal strategies for treatment including both blocking the cell cycle, promoting terminal differentiation, and inducing apoptosis as well as strengthening the immune response.