While the biological importance of the cytochrome P450 system in the liver is well established, much less is known about its role in the brain and drug interactions at the level of brain cells have hardly been investigated. Here, we show that modafinil, a well-known inducer of hepatic CYP enzymes, also increases CYP3A4 expression in human-derived neuron-like SH-SY5Y cells. Upregulation of CYP3A4 by modafinil was associated with increased retinoic acid (RA) degradation, which could be blocked by specific CYP3A4 inhibitor erythromycin. In turn, reduced RA levels in culture medium during modafinil treatment resulted in decreased neuronal differentiation of SH-SY5Y cells as assessed by intracellular neurotransmitter concentrations and proliferative activity. Again, this differentiation-impeding effect of modafinil on SH-SY5Y cells was antagonized by erythromycin. Similarly, modafinil treatment of the murine GL261 glioma cell line resulted in increased proliferative activity. This was associated with upregulation of RA-degrading CYP26A1 in GL261 cells. Taken together, our results indicate that psychopharmacological agents such as modafinil may directly act on CYP enzymes in neural tissue. These kinds of drug effects may become highly relevant especially in the context of biomolecules such as RA whose local metabolism in brain is under tight spatial and temporal control.