For many permanent cell lines the transition from a growing (P) to a resting (R) state is reversibly controlled by growth factors present in serum. This P-to-R transition was studied in a neuronal cell line (B104) with respect to the action of serum, dibutyryl cyclic AMP (DBcAMP), gangliosides, and a glioma cell-produced growth factor GGF. In this cell system gangliosides seem to act as differentiation and survival factors. The kinetics of uptake of radioactively labeled gangliosides and survival experiments both support the idea of the stable incorporation of exogenously added gangliosides into the cells. Based on the experimental evidence a new model of cell development is proposed. Thus in addition to the R or Go state, which in this cell system is rather unstable and probably regulated by cyclic nucleotides, we postulate a differentiated D state, which is controlled by gangliosides and which is characterized by its stability (survival time). This D compartment seems to be closer to the in vivo differentiated neuron than does the R or P state. tthe possible mechanisms for the action of gangliosides are discussed.