Since their first identification by Friedenstein and Petrakova in 1966, mesenchymal stem cells (MSCs) have gained increasing interest due to their potential use in tissue engineering, drug delivery, etc. As adult stem cells, MSCs are able to undergo multi-lineage differentiation into osteoblasts, adipocytes, chondrocytes and other lineages such as neural cells. The small molecule cAMP (cyclic adenosine monophosphate) has been reported to induce MSCs differentiation into neural cells, but the mechanism is unclear. In our lab, we have found cAMP caused G1/S cell cycle arrest in MSCs when a subpopulation of cells underwent differentiation. The G1/S cell cycle arrest is caused by down-regulation of positive cell cycle regulator such as cyclin D1 and up-regulation of negative cell cycle regulator such as p27. Among the negative cell cycle regulators, two CKI (CDK inhibitor) family proteins, p21 and p27, were oppositely regulated. While both p21 and p27 were transcriptionally upregulated, the total protein level of p21 was significantly downregulated whereas p27 total protein level was greatly enhanced. Further experiments indicated that the increase in the p27 protein level mainly resulted from enhanced transcription, while reduction in p21 protein level is largely due to enhanced protein degradation. In addition to being cell cycle regulators, p21 and p27 play other important roles in cellular processes such as differentiation and apoptosis. p21 is reported to play a protective role in many different cells. Interestingly, apoptosis was observed in the cAMP induced MSC neural differentiation, which is likely related to p21 down-regulation. The cells with neural like morphology upon cAMP elevation had re-organized cytoskeleton which may be attributed to p27 modulation. p27 interferes with actin filament dynamics when it translocates to the cytoplasm. Further studies are underway to uncover whether p21 and p27 are the major players in cAMP induced MSCs neural differentiation and concurrent apoptosis.