We and others have demonstrated expression of the aldo-keto reductase AKR1C3 in myeloid leukemia cell lines and that inhibitors of the enzyme, including nonsteroidal anti-inflammatory drugs (NSAIDs), promote HL-60 differentiation in response to all-trans retinoic acid (ATRA) and 1alpha,25-dihydroxyvitamin D3 (D3). Here, we demonstrate that overexpression of AKR1C3 reciprocally desensitizes HL-60 cells to ATRA and D3, thus confirming the enzyme as a novel regulator of cell differentiation. AKR1C3 possesses marked 11-ketoreductase activity converting prostaglandin (PG) D2 to PGF2alpha. Supplementing HL-60 cultures with PGD2 mimicked treatment with AKR1C3-inhibitors by enhancing the differentiation of the cells in response to ATRA. However, PGD2 is chemically unstable, being converted first to PGJ2 and then stepwise to 15-deoxy-Delta(12,14)-prostaglandin J2(15Delta-PGJ2), a natural ligand for the peroxisome proliferator-activated receptor-gamma (PPARgamma). Consistent with this, PGD2 was rapidly converted to PGJ2 under normal tissue culture conditions but not in the presence of recombinant AKR1C3 when PGF2alpha was predominantly formed. In addition, PGJ2 but not PGF2alpha recapitulated the potentiation of HL-60 differentiation by PGD2 and AKR1C3 inhibitors. Furthermore, the capacity of all of these treatments to potentiate HL-60 cell differentiation was significantly reduced in the presence of the PPARgamma-antagonist GW 9662. We conclude that AKRIC3 protects HL-60 cells against ATRA and D3-induced cell differentiation by limiting the production of natural PPARgamma ligands via the diversion of PGD2 toward PGF2alpha and away from PGJ2. In addition, these observations identify AKR1C3 as plausible target for the non-cyclooxygenase-dependent antineoplastic actions of NSAIDs.