We reported previously that human prostate cancer cell line TSU-Pr1 can differentiate into microglia-like cells by 12-O-tetra-decanoylphorbol-13-acetate (TPA) treatment. In this study, we identified a signal transduction pathway involved in TPA-induced TSU-Pr1 cell differentiation and investigated the mechanism of growth arrest that accompanies this differentiation. TPA-induced differentiation and growth arrest of TSU-Pr1 cells were inhibited by treatment with Protein kinase C (PKC) inhibitor GF109203X and mitogen-activated protein (MAP) kinase inhibitor PD98059. Treatment of TSU-Pr1 cells with TPA for 15 min or longer resulted in translocation of PKCalpha, PKCgamma, and PKCepsilon from cytosolic to membrane fraction. Our results suggest that TPA-induced TSU-Pr1 cell differentiation is associated with activation of MAP kinase and PKCalpha, PKCgamma, and PKCepsilon. The mechanism of growth arrest in TSU-Pr1 cells that underwent TPA-induced differentiation were examined for factors in the signaling pathway downstream of MAP kinase that control the cell cycle. Upregulation of p21(WAF1/CIP1) cyclin-dependent kinase inhibitor protein was observed in a manner dependent on PKC or MAP kinase. Moreover, adenovirus-mediated overexpression of recombinant p21(WAF1/CIP1) in TSU-Pr1 cells result in growth arrest, morphological change to microglia-like cells, and increased alpha-naphthyl acetate esterase activity, all of which are associated with cellular differentiation. Thus, our results indicate that p21(WAF1/CIP1) mediates TPA-induced growth arrest and differentiation of TSU-Pr1 cells.