The relationship of genes associated with contact inhibition of cell growth and the commitment for differentiation was studied in the human neuroblastoma cell line SH5Y. These cells could be induced to differentiate in vitro into neuronal-like cells upon incubation with retinoic acid, an event that was accompanied by an enhancement in levels of neuron-specific acetylcholinesterase. The kinetics of differentiation, based on morphology and acetylcholinesterase levels, showed that proliferation arrest always preceeded differentiation and may be a prerequisite for differentiation. To determine if this growth arrest is mediated by the same pathway underlying contact inhibition of proliferation, the expression of a gene associated with the induction of contact inhibition, protein disulfide isomerase (PDI), was quantified by Northern blot analysis and enzymatic activity after retinoic acid treatment. Retinoic acid caused a significant elevation of PDI-mRNA within 24 hrs. after treatment with a corresponding increase in enzyme activity which immediately preceeded proliferation arrest and differentiation. Bacitracin, a specific inhibitor of PDI, abrogated the ability of retinoic acid to induce differentiation. However, treatment with interferon also increased PDI activity and caused proliferation arrest and SH5Y differentiation but into a fibroblastoid cell without neurite outgrowth. These results suggest that the commitment for differentiation of SH5Y cells involves a form of proliferation arrest in which activation of PDI activity is a required and early event but one that does not determine the final differentiation pathway.