Interferon gamma (IFN-gamma) is a cytokine predominantly involved in antiproliferative and antiviral responses, immune surveillance, and tumor suppression. However, it has been shown that IFN-gamma is also involved in central nervous system development. Here we studied the underlying mechanism for IFN-gamma-induced neuronal differentiation using the human neuroblastoma Paju cell line. Our results indicate that IFN-gamma treatment led to neurite outgrowth followed by growth arrest in the G1 phase of the cell cycle. IFN-gamma induced ERK1/2 phosphorylation and subsequently the transcription factor early gene response 1, which in turn up-regulated p35 expression and increased cyclin-dependent kinase 5 (Cdk5) activity. IFN-gamma-induced neurite outgrowth was abolished by the treatment of MEK1/2 kinase inhibitors, such as U0126 and PD98059, which inhibit the ERK1/2 activation and subsequently prevent the up-regulation of p35 expression and Cdk5 activity. In agreement with the role of p35-Cdk5 in neuronal differentiation, small interfering RNA targeting Cdk5 abrogate the IFN-gamma-induced neurite outgrowth. Together, these results demonstrate for the first time that IFN-gamma-triggered neuronal differentiation mediated through the up-regulation of p35-associated Cdk5 depends on the activation of the ERK1/2 pathway. Therefore, the present study suggests that IFN-gamma is not only involved in tumorigenicity but also involved in neurogenesis by regulating cell proliferation and differentiation.