All-trans-retinoic acid (ATRA) induces complete remissions in the majority of patients with acute promyelocytic leukemia. Despite continuous p.o. ATRA administration, many patients relapse after a short remission duration. In these patients, ATRA plasma concentrations were found to be very low, which was related to induction of retinoic acid-binding protein and increased drug catabolism by cytochrome P-450-mediated reactions. An i.v. ATRA formulation, which can be achieved by encapsulating ATRA into liposomes, may have the potential to overcome these unwanted effects. We investigated the ability of liposomal ATRA (L-ATRA) to induce differentiation of human myeloid leukemia cell lines (HL-60, KG-1, and THP-1). Cellular differentiation, as assessed by morphological criteria and by the expression of a mature myeloid cell surface antigen (CD11b on HL-60 and KG-1 cells), was induced by culture in the presence of L-ATRA. The ability of L-ATRA-treated HL-60 cells to reduce nitroblue tetrazolium demonstrated that they were functionally differentiated cells. Cell cycle analysis revealed significant growth inhibition of the cells after L-ATRA treatment. Following culture with L-ATRA, cells from five patients with acute promyelocytic leukemia were found to be morphologically and immunophenotypically mature myeloid cells. L-ATRA was as effective as free ATRA in inducing differentiation of the cell lines and of the cells from patients with acute promyelocytic leukemia. We conclude that L-ATRA effectively induces differentiation and may be a useful parenteral ATRA formulation for overcoming the pharmacological mechanisms that lead to "retinoid resistance."