The reversibility of a differentiation program termed dedifferentiation, redifferentiation, or retrodifferentiation opens a spectrum of new possibilities for cellular development. During differentiation and retrodifferentiation, the expression of gene products associated with a differentiated phenotype and cell cycle regulation demonstrate inverse patterns. This effect requires a coordinated network that simultaneously controls cell growth and differentiation. In particular, crosstalk between induction of differentiation and G0/G1 cell cycle exit can be initiated and sustained by activated serine/threonine kinases and tyrosine kinases. Phosphorylation signals are relayed to certain genes or transcription factors such as Fos/Jun, EGR-1, NF-kappa B, MyoD, or the Myc/Max gene family. However, the precise regulation of these transcription factors to confer signals to differentiation-associated and cell cycle-regulatory genes remains unclear. Cell cycle exit into a transient G0'-arrest cycle or a terminal G0 phase is determined by a network of phosphorylation signals involving the retinoblastoma protein and a variety of factors such as the E2F family, cyclins, and cyclin-dependent kinases. In this context, a variety of differentiation-induced cell lines, including monocytic, neuronal, or muscle cells, can progress through the G0'-arrest cycle, whereby a certain population retains the capacity to retrodifferentiate and reenter the cell cycle. In contrast, the rest of the differentiated population enters the irreversible G0 phase (terminal commitment) that finally results in programmed cell death. The expression of growth arrest-specific (gas and gadd) genes is associated with the G0'-arrest cycle, and other factors, including c-myc, p53, mdm2, and bcl2/bclx, contribute to the regulation of the cell death program. Although the precise signaling cascade determining retrodifferentiation or cell death remains unclear, a coordinated inter- and intracellular regulation could establish a certain biological balance between these exclusive pathways. Consequently, a retrodifferentiation process may provide a potential for cell type conversion or transdifferentiation, whereby retrodifferentiated cells can be induced to develop via a different pathway according to tissue-specific requirements.