MYC proto-oncogene is a key player in cell homeostasis that is commonly deregulated in human carcinogenesis 1. MYC can either activate or repress target genes by forming a complex with MAX (ref.2). MYC also exerts MAX-independent functions that are not yet fully characterized 3. Cells possess an intrinsic pathway that can abrogate MYC,MAX dimerization and E-box interaction, by inducing phosphorylation of MYC in a PAK2-dependent manner at three residues located in its helix,loop,helix domain. Here we show that these carboxy-terminal phosphorylation events switch MYC from an oncogenic to a tumour-suppressive function. In undifferentiated cells, MYC,MAX is targeted to the promoters of retinoic-acid-responsive genes by its direct interaction with the retinoic acid receptor-α (RARα). MYC,MAX cooperates with RARα to repress genes required for differentiation, in an E-box-independent manner. Conversely, on C-terminal phosphorylation of MYC during differentiation, the complex switches from a repressive to an activating function, by releasing MAX and recruiting transcriptional co-activators. Phospho-MYC synergizes with retinoic acid to eliminate circulating leukaemic cells and to decrease the level of tumour invasion. Our results identify an E-box-independent mechanism for transcriptional regulation by MYC that unveils previously unknown functions for MYC in differentiation. These may be exploited to develop alternative targeted therapies. © 2011 Macmillan Publishers Limited. All rights reserved.