The MAP kinase pathway is activated by a wide variety of external signals leading to cell proliferation or differentiation. However, it is not clear whether activation of this pathway is required for cellular responses or whether it is only one branch point in signal transduction. To investigate these questions, we generated constitutively activated and interfering mutants of MAP kinase kinase 1. The activated mutants stimulated PC12 cell neuronal differentiation and transformed NIH 3T3 cells. The interfering mutants inhibited growth factor-induced PC12 differentiation, growth factor stimulation of proliferation, and reverted v-src- and ras-transformed cells. These results therefore show that, depending on cellular context, activation of MAP kinase kinase is necessary and sufficient for cell differentiation or proliferation.