Publisher Summary This chapter presents a summarization of a large number of studies aimed at elucidating the signaling system by which determined cells decide to activate a terminal differentiation program. Using adipogenic cells in culture, it can be documented that the hormonal milieu plays a major role in dictating the decision to trigger differentiation. The effects of indomethacin suggest that the products of arachidonic acid may play a key role in the regulation of cell differentiation. Inhibition of protein kinase C activity is important for triggering differentiation as its activation by phorbol esters or certain growth factors inhibit expression of the differentiated phenotype. The phorbol ester and the growth factor repressible clone 5 gene play an important role in defining the biochemical state associated with the potential for differentiation; in particular, suppression of clone 5 gene expression appears to correlate with entry of cells into a nonproliferative state within the G1 portion of the cell cycle in which cells are incapable of differentiating.