Previously, we have found that caspase-1 activity is increased during myoblast differentiation to myotubes. Here we show that caspase-1 activity is required for PC12 differentiation to neuronal-like cells. Caspase-1 is shown to be activated (by immunoblotting and by assessing activity in cell extracts) in the PC12 cells following the initial stage of differentiation. The inhibition of caspase-1 arrests PC12 cells at an intermediate stage of differentiation and prevents neurite outgrowth in these cells; the inhibition is reversed upon the removal of the inhibitor. Calpastatin (calpain endogenous specific inhibitor, and a known caspase substrate) is diminished at the later stages of PC12 cell differentiation, and diminution is prevented by caspase-1 inhibition. The degradation of fodrin (a known caspase and calpain substrate) is found in the advanced stage of differentiation. Caspase-1 has been implicated in the activation of proinflammatory cytokines, and in cell apoptosis. The involvement of caspase-1 in two distinct differentiation processes (myoblast fusion and neuronal differentiation of PC12 cells) indicates a function for this caspase in differentiation processes, and suggests some common mechanisms underlying caspase roles in such processes.