Retinoic acid (RA) promotes granulocytic differentiation of normal hematopoietic cells and acute promyelocytic leukemia (APL) blasts by transcriptional modulation of myeloid regulatory genes. In this study, we have identified the C/EBP homologous protein (CHOP) as a novel retinoid-responsive gene using a polymerase chain reaction (PCR)-based cDNA subtraction method. All-trans retinoic acid (ATRA) induced a biphasic expression of CHOP mRNA in the NB4 and HL60 AML cell lines. Levels of CHOP expression increased within 1 hour of exposure to ATRA. ATRA expression became nearly absent between 6 and 24 hours, and a second phase of induction occurred after 48 hours. Retinoid-dependent regulation of CHOP expression was also observed in normal human neutrophils but not in peripheral blood mononuclear cells. In addition, retinoid-dependent regulation of CHOP expression was not observed in retinoid-nonresponsive cell lines HL60R and NB4-R2. CHOP expression was regulated at the transcriptional level and was independent of new protein synthesis. CHOP heterodimerized with C/EBPepsilon and negatively regulated the myeloid-specific gene lactoferrin. Furthermore, CHOP transcriptionally inhibited C/EBPalpha- and C/EBPepsilon-dependent induction of secondary granule gene expression. RA signaling in granulocytic differentiation involves regulated expression of CHOP and C/EBPepsilon in a coordinated fashion.