The differentiation and senescence programs of metazoans play key roles in regulating normal development and preventing aberrant cell proliferation, such as cancer. These programs are intimately associated with both the mitotic and apoptotic pathways. Caspase-8 is an apical apoptotic initiator that has recently been appreciated to coordinate non-apoptotic roles in the cell. Most of these functions are attributed to the catalytic domain, however, the amino-terminal death effector domains (DED)s, which belong to the death domain superfamily of proteins, can also play key roles during development. Here we describe a novel role for caspase-8 DEDs in regulating cell differentiation and senescence. Caspase-8 DEDs accumulate during terminal differentiation and senescence of epithelial, endothelial and myeloid cells; genetic deletion or shRNA suppression of caspase-8 disrupts cell differentiation, while re-expression of DEDs rescues this phenotype. Among caspase-8 deficient neuroblastoma cells, DED expression attenuated tumor growth in vivo and proliferation in vitro via disruption of mitosis and cytokinesis, resulting in upregulation of p53 and induction of differentiation markers. These events occur independent of caspase-8 catalytic activity, but require a critical lysine (K156) in a microtubule-binding motif in the second DED domain. The results demonstrate a new function for the DEDs of caspase-8, and describe an unexpected mechanism that contributes to cell differentiation and senescence.