Breaking the balance between proliferation and differentiation in animal cells can lead to cancer, but the mechanisms maintaining this balance remain largely undefined. The calcium activated chloride channel A1 (CLCA1) is a member of the calcium sensitive chloride conductance family of proteins and is expressed mainly in the colon, small intestine and appendix. We show that CLCA1 plays a functional role in differentiation and proliferation of Caco-2 cells and of intestinal tissue. Caco-2 cells spontaneously differentiate either in confluent culture or when treated with butyrate, a molecule present naturally in the diet. Here, we compared CLCA1 expressional levels between patients with and without colorectal cancer (CRC) and determined the functional role of CLCA1 in differentiation and proliferation of Caco-2 cells. We showed that: 1) CLCA1 and CLCA4 expression were down-regulated significantly in CRC patients; 2) CLCA1 expression was up-regulated in Caco-2 cells induced to differentiate by confluent culture or by treatment with sodium butyrate (NaBT); 3) Knockdown of CLCA1 with siRNA significantly inhibited cell differentiation and promoted cell proliferation in Caco-2 confluent cultures, and 4) In Caco-2 3D culture, suppression of CLCA1 significantly increased cell proliferation and compromised NaBT-induced inhibition of proliferation. In conclusion, CLCA1 may contribute to promoting spontaneous differentiation and reducing proliferation of Caco-2 cells and may be a target of NaBT-induced inhibition of proliferation and therefore a potential diagnostic marker for CRC prognosis.