Acute promyelocytic leukemia (APL), once considered the most devastating subtype of acute myeloid leukemia, is now the most treatable of all subtypes as a result of intensive research into its molecular pathogenesis. This research has led to a rational approach to treatment in which the use of the differentiating agent all-trans-retinoic acid (ATRA) has proven to be effective first-line treatment for inducing complete remission. Arsenic trioxide (ATO) is currently used to treat relapsed disease, further enhancing survival rates in a patient population for which limited salvage options exist. This review discusses the molecular mechanisms responsible for development of APL and the evolution of treatment options over the last three decades, including the major advances using ATRA and ATO in the last 12 years. The mechanism of action of ATO is also described in view of this agent's potential for broader therapeutic application in a variety of hematologic malignancies.