Cell cycle G(1) exit is a critical stage where cells commonly commit to proliferate or to differentiate, but the biochemical events that regulate the proliferation/differentiation (P/D) transition at G(1) exit are presently unclear. We previously showed that MAT1 (ménage à trois 1), an assembly factor and targeting subunit of the cyclin-dependent kinase (CDK)-activating kinase (CAK), modulates CAK activities to regulate G(1) exit. Here we find that the retinoid-induced G(1) arrest and differentiation activation of cultured human leukemic cells are associated with a switch to CAK hypophosphorylation of retinoic acid receptor alpha (RARalpha) from CAK hyperphosphorylation of RARalpha. The switch to CAK hypophosphorylation of RARalpha is accompanied by decreased MAT1 expression and MAT1 fragmentation that occurs in the differentiating cells through the all-trans-retinoic acid (ATRA)-mediated proteasome degradation pathway. Because HL60R cells that harbor a truncated ligand-dependent AF-2 domain of RARalpha do not demonstrate any changes in MAT1 levels or CAK phosphorylation of RARalpha following ATRA stimuli, these biochemical changes appear to be mediated directly through RARalpha. These studies indicate that significant changes in MAT1 levels and CAK activities on RARalpha phosphorylation accompany the ATRA-induced G(1) arrest and differentiation activation, which provide new insights to explore the inversely coordinated P/D transition at G(1) exit.