Expression of the PML-retinoic acid receptor alpha (PML-RARalpha) fusion protein is the initiating genetic event for acute promyelocytic leukemia (APL), but the molecular mechanisms responsible for disease initiation are not yet clear. Several observations have suggested that early myeloid cells are uniquely susceptible to transformation by PML-RARalpha. Recently, we have shown that the early myeloid-specific protease neutrophil elastase is important for APL development in the mouse. To better understand the role of neutrophil elastase for the pathogenesis of APL, we examined the consequences of PML-RARalpha expression in early myeloid cells with or without neutrophil elastase. We found that high-level PML-RARalpha expression was associated with cellular toxicity that was dependent on the expression of neutrophil elastase; a mutant form of PML-RARalpha that resisted neutrophil elastase cleavage was not toxic. When PML-RARalpha was expressed at very low levels in the early myeloid cells of mice, it induced myeloid expansion and delayed myeloid maturation; neutrophil elastase was also required for these activities. The activities of PML-RARalpha in early myeloid cells are therefore strongly influenced by the presence of neutrophil elastase. To assure physiologic relevance, PML-RARalpha functions should be evaluated in neutrophil elastase-expressing early myeloid cells.