CD99 is a 32-kDa cell surface molecule present on thymocytes, peripheral T cells, many other hematopoietic stem cells and somatic cells were implicated in cell-cell adhesion and cell-activation phenomena. Two major subtypes have been identified so far, designated CD99 type I and type II. We have investigated the correlation between the degree of neural differentiation and the expression of CD99 subtypes in three differentially differentiated cell lines such as CADO-ES1, RD-ES, and SH-N-SY5Y, in order of differentiation. In addition, we induced differentiation of the RD-ES cell line by N6,2'-dibutyryl-cAMP (db-cAMP). Six days after treatment with db-cAMP, RD-ES cell line has changed its morphology from uniform round cells to cells with neurites, and initially CD99 type II-overexpressed RD-ES cells showed significant down-regulation of CD99 type II, whereas CD99 type I expression remained constant. When RD- ES cells were transfected with the cDNA encoding for CD99 type I-green fluorescence protein (GFP) and type II-GFP, CD99 type II transfected RD-ES cell line remained unchanged with morphology of undifferentiated form. Our data suggest that CD99 type II acts as a negative regulator in the neural differentiation of precursor cells that might occur during nerve system development.