Transgenic mice expressing PML-RARα in early myeloid cells under control of human cathepsin G regulatory sequences all develop a myeloproliferative syndrome, but only 15% to 20% develop acute promyelocytic leukemia (APL) after a latent period of 6 to 14 months. However, this transgene is expressed at very low levels in the bone marrow cells of transgenic mice. Because the transgene includes only 6 kb of regulatory sequences from the human cathepsin G locus, we hypothesized that sequences required for high-level expression of the transgene might be located elsewhere in the cathepsin G locus and that a knock-in model might yield much higher expression levels and higher penetrance of disease. We, therefore, targeted a human PML-RARα cDNA to the 5′ untranslated region of the murine cathepsin G gene, using homologous recombination in embryonic stem cells. This model produced a high-penetrance APL phenotype, with more than 90% of knock-in mice developing APL between 6 and 16 months of age. The latent period and phenotype of APL (including a low frequency of an interstitial deletion of chromosome 2) was similar to that of the previous transgenic model. Remarkably, however, the expression level of PML-RARα in bone marrow cells or APL cells was less than 3% of that measured in the low-penetrance transgenic model. Although the explanation for this result is not yet clear, one hypothesis suggests that very low levels of PML-RARα expression in early myeloid cells may be optimal for the development of APL in mice.