PML-RARα is a chimeric transcription factor tightly associated with acute promyelocytic leukemia. PML-RARα plays an important role in the aberrant transcription repression on the target genes of wild-type retinoic acid receptors. Here, we demonstrated that HDAC3, one component of the N-CoR transcription repressor complex, is a key regulator of the transcription repression by PML-RARαin vivo. Using immunoprecipitation, we demonstrated that PML-RARα interacts with N-CoR/HDAC3 in vivo without ligand. Next, using chromatin immunoprecipitation (ChIP) assay, this N-CoR/HDAC3 co-repressor complex was recruited to the endogenous target promoters (RARβ and CYP26) through PML-RARα. The neighboring histones were de-acetylated and gene expression was repressed. When HDAC3 protein was knocked down by RNA interference in PML-RARα-expressing cells, the endogenous target genes were significantly activated, which was also confirmed by promoter-luciferase reporter assay. These results provide evidence to show that the N-CoR/HDAC3 co-repressor complex is involved in the aberrant transcription regulation in PML-RARα-expressing cells.