In acute promyelocytic leukemia (APL), the translocation t (15; 17) induces a block at the promyelocytic stage of differentiation in an all‐trans‐retinoic acid (ATRA)‐responsive manner. Here we report that upon treatment with ATRA, t (15; 17) cells (NB4) reveal a very rapid increase in protein level and binding activity of C/EBPβ, a C/EBP family member, which was not observed in an ATRA‐resistant NB4 cell line. We further provide evidence that ATRA mediates a direct increase of C/EBPβ, only in PML–RARA (promyelocytic leukemia–retinoic acid receptor α)‐expressing cells. In addition, transactivation experiments indicate that the PML–RARA fusion protein, but not PML–RARA mutants defective in transactivation, strongly transactivates the C/EBPβ promoter. These results suggest that PML–RARA mediates ATRA‐induced C/EBPβ expression. Finally, we demonstrate the importance of C/EBPβ in granulocytic differentiation. We show that not only does C/EBPβ induce granulocytic differentiation of non‐APL myeloid cell lines independent of addition of ATRA or other cytokines, but also that C/EBPβ induction is required during ATRA‐induced differentiation of APL cells. Taken together, C/EBPβ is an ATRA‐dependent PML–RARA target gene involved in ATRA‐induced differentiation of APL cells.