Retinoic acid (RA) and interferon (IFN) potentiate each other to induce biological responses. Their combination has shown synergistic differentiating, antiproliferative and antiviral activities in various cell lines including those derived from the acute promyelocytic leukemia (APL). IFNs have demonstrated broad applications in cancer, as well as in virologic diseases. RA has variable effectiveness in therapy. Its real success is in APL where it provides the first example of a differentiation therapy. However, complete clinical remission with RA alone is always transient as RA resistance develops in the treated patients as well as in vitro. In various cell lines, including those derived from APL, RA induces directly the expression of two transcription factors, Stat1 and IRF-1 which play central roles in the IFN signal transduction. In addition, RA induces IFN-α synthesis and enhances the IFN-induced Stat activation. Here, we review the molecular mechanisms by which RA and IFNs can cooperate in inducing differentiation, inhibition of cell growth or viral replication focusing on recent results derived from normal and RA-resistant APL cells.