Cellular differentiation of the neuroblastoma X glioma hybrid cell line NG108–15 was measured and correlated with quantitative changes in the cells' ganglioside composition. The degree of differentiation was measured using an enzymatic marker, choline acetyltransferase (CAT), which is responsible for neurotransmitter synthesis in this cell line. Differentiation of these cells is commonly induced by agents such as dibutyryl cyclic adenosine 3′:5′-monophosphate (Bt2cAMP). However, in our studies, we observed that these cells “self-differentiated,” in the absence of chemical inducers, when the cells became dense in culture. The differentiation marker, CAT specific activity, rose from 150 to more than 400 pmol/min/mg of protein as cell density increased, attaining a level higher than that achieved by treatment with Bt2cAMP. Differentiation of sparse cultures could be induced by conditioned medium removed from dense cultures. This effect was not due to depletion of a serum component from the medium by the cells, since it was not mimicked by serum depletion or inhibited by addition of fresh serum to the conditioned medium. These data suggest that cell density- dependent differentiation was caused by release of a factor from the cells which induced differentiation in a concentration-dependent manner. Gangliosides, therefore, were purified from sparse control cultures, dense cultures, and cultures treated with the differentiating agents Bt2cAMP, prostaglandin E1 (plus theophylline), or butyric acid. Quantitative thin layer chromatography revealed that all of the cultures contained the four gangliosides GM3, GM2, GM1, and GD1a. The concentration of one of the gangliosides, GM2, increased markedly (up to 12-fold) during differentiation. The GM2 concentration correlated closely with the level of CAT activity in the different cultures (r = 0.99). These data demonstrate that the ganglioside concentration in these cells is regulated during differentiation, a finding consistent with a possible role for gangliosides in the differentiated phenotype.