Mutations in the ret proto-oncogene constitute the germ line defect in patients with inherited forms of medullary thyroid carcinoma (MTC) and are also present in tumor DNA from a subset of patients with sporadic forms of MTC. We now show that the TT cell line of human MTC can be induced within 48 h to resemble mature C cell differentiation by activation of the raf-1 signal transduction pathway. Within this time period, expression of both the mutant and wild-type ret gene alleles, present in these cells, are silenced at the mRNA and protein levels. This definition of a signal transduction pathway that can regulate ret gene expression, and of the position of ret gene expression in endocrine differentiation, should help clarify the precise role of this gene in normal neuroendocrine development and in the formation of MTC.