Pathogenesis of acute promyelocytic leukemia (APL) has been proposed to involve transcriptional repression through enhanced corepressors binding onto RARA moieties of PML/RARA homodimers. Unexpectedly, we show that the K160 sumoylation site in the PML moiety of PML/RARA is required for efficient immortalization/differentiation arrest ex vivo, implying that RARA homodimerization is insufficient to fully immortalize primary hematopoietic progenitor cells. Similarly, PML/RARAK160R transgenic mice develop myeloproliferative syndromes, but never APL. The Daxx repressor no longer binds PML/RARAK160R, but fusion of these two proteins restores the differentiation block ex vivo. Thus, transcriptional repression dependent on a specific sumoylation site in PML is critical for the APL phenotype, while forced RARA dimerization could control expansion of the myeloid compartment.