Glioblastoma is the deadliest and most prevalent brain tumor, which is not yet amenable to any treatments. Therefore, new and innovative therapeutic strategies need to be developed for treating this deadly disease. We found that all-trans retinoic acid (ATRA) or 13-cis retinoic acid (13-CRA) induced astrocytic differentiation with down regulation of telomerase activity in rat glioblastoma C6 cells and enhanced sensitivity of the cells to interferon-gamma (IFN-gamma) or taxol (TXL) for apoptosis. Sensitivity of differentiated cells to IFN-gamma or TXL was greatly increased for apoptosis with increases in calcineurin expression, Bax:Bcl-2 ratio, mitochondrial release of cytochrome c, and expression and activity of calpain and caspases. Treatment with IFN-gamma activated caspase-8 indicating induction of apoptosis via the receptor-mediated pathway. Notably, IFN-gamma activated the signal transducer and activator of transcription-1 (STAT-1) for signaling via binding to gamma activator sequence (GAS), whereas TXL activated Raf-1 kinase for inactivation of Bcl-2 by its phosphorylation. We confirmed involvement of different proteolytic mechanisms in cell death by pretreating the cells with caspase-8 inhibitor II, calpeptin (calpain inhibitor), and caspase-9 inhibitor I, and caspase-3 inhibitor IV. Results demonstrated that retinoids induced astrocytic differentiation with down regulation of telomerase activity and worked synergistically to enhance sensitivity of cells to the cytotoxic agent IFN-gamma and the cytostatic agent TXL for apoptosis. This combination therapy for differentiation and apoptosis could be highly effective for controlling the malignant growth of glioblastoma.