Studies on the molecular mechanisms underlying neuronal differentiation are frequently performed using cell lines established from neuroblastomas. In this study we have used mouse N1E-115 neuroblastoma cells that undergo neuronal differentiation in response to DMSO. During differentiation, cyclin-dependent kinase (cdk) activities decline and phosphorylation of the retinoblastoma gene product (pRb) is lost, leading to the appearance of a pRb-containing E2F DNA-binding complex. The loss of cdk2 activity is due to a decrease in cdk2 abundance whereas loss of cdk4 activity is caused by strong association with the cdk inhibitor (CKI) p27KIP1 and concurrent loss of cdk4 phosphorylation. Moreover, neuronal differentiation can be induced by overexpression of p27KIP1 or pRb, suggesting that inhibition of cdk activity leading to loss of pRb phosphorylation, is the major determinant for neuronal differentiation.