Differentiation syndrome (DS) is a life-threatening complication arising during retinoid treatment of acute promyelocytic leukemia (APL). Administration of all-trans retinoic acid leads to significant changes in gene expression, among the most induced of which is transglutaminase 2, which is not normally expressed in neutrophil granulocytes. To evaluate the pathophysiological function of transglutaminase 2 in the context of immunological function and disease outcomes, such as excessive superoxide anion, cytokine, and chemokine production in differentiated NB4 cells, we used an NB4 transglutaminase knock-out cell line and a transglutaminase inhibitor, NC9, which inhibits both transamidase- and guanosine triphosphate-binding activities, to clarify the contribution of transglutaminase to the development of potentially lethal DS during all-trans retinoic acid treatment of APL. We found that such treatment not only enhanced cell-surface expression of CD11b and CD11c but also induced high-affinity states; atypical transglutaminase 2 expression in NB4 cells activated the nuclear factor kappa (κ)-light-chain-enhancer of the activated B-cell pathway, driving pathogenic processes with an inflammatory cascade through the expression of numerous cytokines, including tumor necrosis factor alpha (TNF-α), interleukin 1 beta (IL-1β), and monocyte chemoattractant protein 1. NC9 decreased the amount of transglutaminase 2, p65/RelA, and p50 in differentiated NB4 cells and their nuclei, leading to attenuated inflammatory cytokine synthesis. NC9 significantly inhibits transglutaminase 2 nuclear translocation but accelerates its proteasomal breakdown. This study demonstrates that transglutaminase 2 expression induced by all-trans retinoic acid treatment reprograms inflammatory signaling networks governed by nuclear factor κ-light-chain-enhancer of activated B-cell activation, resulting in overexpression of TNF-α and IL-1β in differentiating APL cells, suggesting that atypically expressed transglutaminase 2 is a promising target for leukemia treatment.