G protein‐coupled receptors (GPCRs) detect a great diversity of extracellular stimuli ranging from hormonal peptides, chemokines, neurotransmitters, lipids, nucleotides, amino acids, biogenic amines to ions. G protein‐coupled pathways regulate a rich collection of biological processes involved in normal physiological function of the body as well as in pathological progression of diseases. In addition to their function in postmitotic steady‐state tissues, GPCRs have been implicated in the differentiation of stem cells and tissue specific progenitor cells during development. Examples of these include the functions of nucleotides and neuropeptides in neuronal differentiation and axon growth, chemokines in lymphocyte differentiation and activation, and other GPCR‐mediated processes in the differentiation of adipocytes, osteoblasts and smooth muscle cells. This review summarizes the recent advances in our understanding of the importance of GPCR‐linked signaling cascades in the differentiation of different cell lineages. © 2009 International Union of Biochemistry and Molecular Biology, Inc.