The altered patterns of expression of gangliosides during density-dependent growth inhibition, oncogenic transformation, and embryogenesis suggest that gangliosides, sialylated membrane glycolipids, may affect cellular proliferation and differentiation. Gangliosides of the "b" pathway of ganglioside synthesis, including G M3, G D3, and G D1b, inhibit the proliferation of cultured keratinocytes without increasing differentiation. We have examined the effect on keratinocyte proliferation and differentiation of supplemental ganglioside G T1b, a more highly sialylated ganglioside of the "b" synthetic pathway that is also present in cultured keratinocytes. In contrast to the lack of effect on differentiation of these other gangliosides, we noted significant induction of keratinocyte differentiation by G T1b, as evidenced by early desmosome formation, and increased cornified envelope formation and expression of involucrin and of the differentiation-specific keratin K1. The addition of G T1b did not cause a shift in intracellular free calcium or alter protein kinase C activity. Alterations in the membrane concentration of ganglioside G T1b, a minor ganglioside component of the keratinocyte membrane, may participate in regulating keratinocyte differentiation.