The ATM protein kinase is mutated in ataxia telangiectasia, a genetic disease characterized by defective DNA repair, neurodegeneration, and growth factor signaling defects. The activity of ATM kinase is activated by DNA damage, and this activation is required for cells to survive genotoxic events. In addition to this well characterized role in DNA repair, we now demonstrate a novel role for ATM in the retinoic acid (RA)-induced differentiation of SH-SY5Y neuroblastoma cells into post-mitotic, neuronal-like cells. RA rapidly activates the activity of ATM kinase, leading to the ATM-dependent phosphorylation of the CREB protein, extrusion of neuritic processes, and differentiation of SH-SY5Y cells into neuronal-like cells. When ATM protein expression was suppressed by short hairpin RNA, the ATM-dependent phosphorylation of CREB was blocked. Furthermore, ATM-negative cells failed to differentiate into neuronal-like cells when exposed to retinoic acid; instead, they underwent cell death. Expression of a constitutively active CREBVP16 construct, or exposure to forskolin to induce CREB phosphorylation, rescued ATM negative cells and restored differentiation. Furthermore, when dominant negative CREB proteins with mutations in either the CREB phosphorylation site (CREBS133A) or the DNA binding domain (KCREB) were introduced into SH-SY5Y cells, retinoic acid-induced differentiation was blocked and the cells underwent cell death. The results demonstrate that ATM is required for the retinoic acid-induced differentiation of SH-SY5Y cells through the ATM dependent-phosphorylation of serine 133 of CREB. These results therefore define a novel mechanism for activation of the activity of ATM kinase by RA, and implicate ATM in the regulation of CREB function during RA-induced differentiation.