Cells have developed lineage-specific mechanisms to control proliferation and drive morphologic changes upon differentiation. A hallmark of differentiation is the assembly of signaling molecules that transduce extracellular signals, such as the production of the G protein-regulated enzyme phospholipase Cβ (PLCβ), which generates calcium signals from sensory stimuli. We found that in most cancerous cell lines there is positive correlation between PLCβ1 levels and cell proliferation. In cells of neuronal lineage, however, reducing PLCβ1 levels increases the rate of proliferation. Using a combination of biochemical and biophysical methods, we find that, in the G phase, a cytosolic population of PLCβ1 associates with cyclin-dependent kinase 16 (CDK16), a neuron-specific enzyme that is activated by cyclin Y to inactivate the antioncogenic protein p27. Binding of PLCβ1 directly inhibits CDK16 activity and in turn reduces the ability of cells to enter the S phase. Activation of Gα by carbachol causes movement of PLCβ from the cytosol to the plasma membrane, reducing its association with CDK16. Similarly, the overexpression of activated Gα moves PLCβ1 to the membrane, reverses G arrest, and promotes proliferation, thereby connecting external stimuli with cell proliferation. Our results present a model in which the transient high expression of PLCβ1 that occurs at the onset of differentiation arrests cells in the G phase through its association with CDK16 and allows CDK16 to transition to its postmitotic function of neurite outgrowth and trafficking of synaptic vesicles. The novel role of PLCβ1 in neuronal cell proliferation offers a unique interaction that can be manipulated to guide cells into a neuronal phenotype or to develop therapies for neuroblastomas.-Garwain, O., Valla, K., Scarlata, S. Phospholipase Cβ1 regulates proliferation of neuronal cells.