The main purpose of this paper is to present the results of research, that aimed to investigate the effect of lesson study as a professional development activity on the effective implementation of differentiated instruction and, above all, to identify which specific characteristics of lesson study as a professional development activity influence the plan, implementation, and understanding of the differentiation by the teachers, in the teaching of the Modern Greek Language course of the 2nd class of Lyceum. The research was qualitative and grounded theory data collection and analysis techniques were used, in the context of its implementation. The research was carried out in three schools in two municipalities of Eastern Attica, with the participation of four teachers and eighty students. Data were collected before, during, and after the lesson study cycle and included classroom observations, interviews of the participating teachers, protocols for planning, observing, revising, and reflecting on the research lesson as well as transcripts of teacher meetings and the teaching of the research lesson, diaries, which were kept during the implementation of the lesson study, students' assignments as well as their interviews after the teaching. The research showed that the lesson study cycle outcomes for each participating teacher were greatly influenced by the completion of all stages of a lesson study cycle, as there were no characteristics that alone accounted for these outcomes. Teachers' thoughts and opinions about the process support this finding. All participants referred to their positive experience of the lesson study process holistically, demonstrating that all stages of the lesson study cycle are important and interdependent.