Mesenchymal stem cells (MSC) are multipotent and give rise to distinctly differentiated cells from all three germ layers. While umbilical cord blood derived mesenchymal-like cells were previously shown to be capable of differentiating into the neural lineage both in vitro and in vivo, the underlying molecular mechanisms and signal transduction pathways remain to be elucidated. In this study, we show that mesenchymal-like cells from umbilical cord blood are capable of neural differentiation and this capability is mediated by the Protein kinase A (PKA) signal transduction pathway. While activation of PKA via experimental cAMP upregulation leads to outgrowth of neurite-like structures as well as expression of neural marker genes, blocking PKA activity completely abolishes all these features. Thus, our results demonstrate that PKA function is sufficient and required for neurite-like outgrowth and regulation of neural specific gene expression in mesenchymal-like stem cells from cord blood. (c) 2007 Elsevier Inc. All rights reserved.