Glioblastoma multiforme is the most common malignant brain tumor in adults, with an average survival of less than one year due to its resistance to therapy. Recent studies reported that GBM initiates from CD133-expressing cancer stem cells (CSC). However, the efficacy of CSC targeting is limited. A newly developed approach in cancer treatment is the forced differentiation of cancer cells. Here, we show that the treatment of the novel small molecule, CG500354, into CD133-expressing human primary GBM cells induces growth arrest by cell cycle regulators, p53, p21, p27 and phase-specific cyclins, and neural differentiation, as confirmed by neural progenitor/precursor markers, nestin, GFAP and Tuj1. When GBM-derived cells caused the tumors in NOD/SCID mice, CG500354 induced GBM-derived cells differentiation into Tuj1 and GFAP expressing cells. We next demonstrated that CG500354 plays a tumor-suppressive role via cAMP/CREB signaling pathway. CG500354 increases not only the extracellular cAMP level but also the protein level of PKA and CREB. Additionally, both mimetic substances, Forskolin and Rolipram, revealed comparable results with CG500354. Our findings indicate that induction of growth arrest and neural differentiation via cAMP/CREB signaling pathway by CG500354 treatment suggests the novel targeting of PDE4D in the development of new drugs for brain tumor therapy.