Here we examine differentiation of the intestinal cell line Caco-2 following exposure to sodium butyrate (NaBT), using alkaline phosphatase (ALP) activity and carcinoembryonic antigen (CEA) levels as markers of differentiation. We show that acetylcholinesterase (AChE) activity and RNA levels increase during differentiation. Treatment with AChE inhibitors or knockdown of AChE levels by shRNA markedly decrease ALP and CEA levels in a concentration- and time-dependent manner. Finally, our observations suggest that NaBT-induced differentiation of intestinal cells involves AChE-induced cell cycle arrest.