Retinoic acid (RA) induces neural differentiation of SH-SY5Y neuroblastoma cells. We show that the mRNA levels of the differentiation-inhibiting basic helix-loop-helix transcription factors ID1, ID2, and ID3 are down-regulated during RA-induced differentiation of SHSY5Y cells. The levels of ID proteins decreased in parallel to the observed transcriptional repression. The expression of other basic helix-loop-helix genes changed during RA-induced differentiation: expression of neuroblast-specific ASCL1 (HASH-1) gene was promptly reduced after RA treatment, whereas expression of differentiation-promoting genes NEUROD6 (NEX-1, HATH-2) and NEUROD1 was increased. Treatments with 12-O-tetradecanoylphorbol-13-acetate, another inducer of neuroblastoma cell differentiation, also resulted in coordinated down-regulation of ID gene expression, underscoring the role of ID genes in differentiation. Downregulation of ID gene expression by RA involves a complex mechanism because full transcriptional repression required newly synthesized proteins and signaling by phosphatidylinositol 3-kinase (PI3K). RA treatment activates the PI3K/Akt signaling pathway, resulting in increased PI3K activity in extracts from RA-treated cells and a rapid increase in phosphorylation of Akt in Ser-473. Inhibition of PI3K by LY294002 impaired RA-induced differentiation, as assessed by morphological and biochemical criteria. We propose that RA, by activating the PI3K/Akt signaling pathway, plays an important role in the regulation of neuronal cell survival.