We have demonstrated previously that the Myc oncoprotein blocks cancer cell differentiation by forming a novel transcriptional repressor complex with histone deacetylase and inhibiting gene transcription of tissue transglutaminase (TG2). Moreover, induction of TG2 gene transcription and transamidase activity is essential for the differentiating effects of retinoids in cancer cells. Here, we show that two structurally distinct TG2 protein isoforms, the full-length (TG2-L) and the short form (TG2-S), exert opposing effects on cell differentiation. Repression of TG2-L with small interfering RNA, which did not affect TG2-S expression, induced dramatic neuritic differentiation in neuroblastoma cells. In contrast, overexpression of TG2-S or a GTP-binding-deficient mutant of TG2-L (R580A), both of which lack the GTP-binding Arg-580 residue, induced neuroblastoma cell differentiation, which was blocked by an inhibitor of transamidase activity. Whereas N-Myc repressed and retinoid activated both TG2 isoforms, repression of TG2-L, but not simultaneous repression of TG2-L and TG2-S, enhanced neuroblastoma cell differentiation due to N-Myc small interfering RNA or retinoid. Moreover, suppression of vasoactive intestinal peptide (VIP) expression alone induced neuroblastoma cell differentiation, and VIP was up-regulated by TG2-L, but not TG2-S. Taken together, our data indicate that TG2-L and TG2-S exert opposite effects on cell differentiation due to differences in GTP binding and modulation of VIP gene transcription. Our findings highlight the potential importance of repressing the GTP binding activity of TG2-L or activating the transamidase activity of TG2-L or TG2-S for the treatment of neuroblastoma, and possibly also other Myc-induced malignancies, and for enhancing retinoid anticancer effects.Neuroblastoma, which originates from precursor neuroblasts of the sympathetic nervous system, is the commonest solid tumor in early childhood with a cure rate of only 40%, even with intensive chemoradiotherapy, retinoid differentiation therapy, surgery, and autologous bone marrow transplant (1, 2). N-Myc oncogene amplification and consequent overexpression of N-Myc mRNA and protein are seen as a clonal feature in 25-30% of tumors and correlate with poor prognosis in patients with neuroblastoma (3). The N-Myc oncoprotein exerts its effects by direct binding to cognate DNA sequences and modulating gene transcription (4), leading to a cell differentiation block, proliferation, malignant transformation, and tumor progression (3, 5).Conventional therapy for neuroblastoma patients now includes a retinoid differentiation agent (1, 2). Unlike conventional chemoradiotherapy, differentiation therapy demonstrates minimal side effects on normal cells. However, resistance to retinoids eventually develops in more than 50% of neuroblastoma patients. Thus, a better understanding of tumor cell sensitivity and resistance to this type of agent may provide novel therapeutic targets for drug discovery.One of the key factors involved in the neuroblasto...