In developmental biology, cellular differentiation is the process by which a less specialized cell becomes a more specialized cell type. Differentiation occurs numerous times during the development of a multicellular organism as the organism changes from a simple zygote to a complex system of tissues and cell types. Differentiation is a common process in adults as well: adult stem cells divide and create fully differentiated daughter cells during tissue repair and during normal cell turnover. Differentiation dramatically changes a cell's size, shape, membrane potential, metabolic activity, and responsiveness to signals. These changes are largely due to highly controlled modifications in gene expression. With a few exceptions, cellular differentiation almost never involves a change in the DNA sequence itself. Thus, different cells can have very different physical characteristics despite having the same genome.
A cell that can differentiate into all cell types of the adult organism is known as pluripotent. Such cells are called embryonic stem cells in animals and meristematic cells in higher plants. A cell that can differentiate into all cell types, including the placental tissue, is known as totipotent. In mammals, only the zygote and subsequent blastomeres are totipotent, while in plants many differentiated cells can become totipotent with simple laboratory techniques. In cytopathology, the level of cellular differentiation is used as a measure of cancer progression. "Grade" is a marker of how differentiated a cell in a tumor is.
Mammalian cell types 
Three basic categories of cells make up the mammalian body: germ cells, somatic cells, and stem cells. Each of the approximately 100 trillion (1014) cells in an adult human has its own copy or copies of the genome except certain cell types, such as red blood cells, that lack nuclei in their fully differentiated state. Most cells are diploid; they have two copies of each chromosome. Such cells, called somatic cells, make up most of the human body, such as skin and muscle cells. Cells differentiate to specialize for different functions.
Germ line cells are any line of cells that give rise to gametes—eggs and sperm—and thus are continuous through the generations. Stem cells, on the other hand, have the ability to divide for indefinite periods and to give rise to specialized cells. They are best described in the context of normal human development.
Development begins when a sperm fertilizes an egg and creates a single cell that has the potential to form an entire organism. In the first hours after fertilization, this cell divides into identical cells. In humans, approximately four days after fertilization and after several cycles of cell division, these cells begin to specialize, forming a hollow sphere of cells, called a blastocyst. The blastocyst has an outer layer of cells, and inside this hollow sphere, there is a cluster of cells called the inner cell mass. The cells of the inner cell mass go on to form virtually all of the tissues of the human body. Although the cells of the inner cell mass can form virtually every type of cell found in the human body, they cannot form an organism. These cells are referred to as pluripotent.
- Hematopoietic stem cells (adult stem cells) from the bone marrow that give rise to red blood cells, white blood cells, and platelets
- Mesenchymal stem cells (adult stem cells) from the bone marrow that give rise to stromal cells, fat cells, and types of bone cells
- Epithelial stem cells (progenitor cells) that give rise to the various types of skin cells
- Muscle satellite cells (progenitor cells) that contribute to differentiated muscle tissue.
A pathway that is guided by the cell adhesion molecules consisting of four amino acids, arginine, glycine, asparagine, and serine, is created as the cellular blastomere differentiates from the single-layered blastula to the three primary layers of germ cells in mammals, namely the ectoderm, mesoderm and endoderm (listed from most distal (exterior) to proximal (interior)). The ectoderm ends up forming the skin and the nervous system, the mesoderm forms the bones and muscular tissue, and the endoderm forms the internal organ tissues.
Dedifferentiation is a cellular process often seen in more basal life forms such as worms and amphibians in which a partially or terminally differentiated cell reverts to an earlier developmental stage, usually as part of a regenerative process. Dedifferentiation also occurs in plants. Cells in cell culture can lose properties they originally had, such as protein expression, or change shape. This process is also termed dedifferentiation.
Some believe dedifferentiation is an aberration of the normal development cycle that results in cancer, whereas others believe it to be a natural part of the immune response lost by humans at some point as a result of evolution.
A small molecule dubbed reversine, a purine analog, has been discovered that has proven to induce dedifferentiation in myotubes. These dedifferentiated cells could then redifferentiate into osteoblasts and adipocytes.
Each specialized cell type in an organism expresses a subset of all the genes that constitute the genome of that species. Each cell type is defined by its particular pattern of regulated gene expression. Cell differentiation is thus a transition of a cell from one cell type to another and it involves a switch from one pattern of gene expression to another. Cellular differentiation during development can be understood as the result of a gene regulatory network. A regulatory gene and its cis-regulatory modules are nodes in a gene regulatory network; they receive input and create output elsewhere in the network. The systems biology approach to developmental biology emphasizes the importance of investigating how developmental mechanisms interact to produce predictable patterns (morphogenesis). (However, an alternative view has been proposed recently. Based on stochastic gene expression, cellular differentiation is the result of a Darwinian selective process occurring among cells. In this frame, protein and gene networks are the result of cellular processes and not their cause. See: Cellular Darwinism)
A few evolutionarily conserved types of molecular processes are often involved in the cellular mechanisms that control these switches. The major types of molecular processes that control cellular differentiation involve cell signaling. Many of the signal molecules that convey information from cell to cell during the control of cellular differentiation are called growth factors. Although the details of specific signal transduction pathways vary, these pathways often share the following general steps. A ligand produced by one cell binds to a receptor in the extracellular region of another cell, inducing a conformational change in the receptor. The shape of the cytoplasmic domain of the receptor changes, and the receptor acquires enzymatic activity. The receptor then catalyzes reactions that phosphorylate other proteins, activating them. A cascade of phosphorylation reactions eventually activates a dormant transcription factor or cytoskeletal protein, thus contributing to the differentiation process in the target cell. Cells and tissues can vary in competence, their ability to respond to external signals.
Signal Induction[disambiguation needed] refers to cascades of signaling events, during which a cell or tissue signals to another cell or tissue to influence its developmental fate. Yamamoto and Jeffery investigated the role of the lens in eye formation in cave- and surface-dwelling fish, a striking example of induction. Through reciprocal transplants, Yamamoto and Jeffery found that the lens vesicle of surface fish can induce other parts of the eye to develop in cave- and surface-dwelling fish, while the lens vesicle of the cave-dwelling fish cannot.
Other important mechanisms fall under the category of asymmetric cell divisions, divisions that give rise to daughter cells with distinct developmental fates. Asymmetric cell divisions can occur because of asymmetrically expressed maternal cytoplasmic determinants or because of signaling. In the former mechanism, distinct daughter cells are created during cytokinesis because of an uneven distribution of regulatory molecules in the parent cell; the distinct cytoplasm that each daughter cell inherits results in a distinct pattern of differentiation for each daughter cell. A well-studied example of pattern formation by asymmetric divisions is body axis patterning in Drosophila. RNA molecules are an important type of intracellular differentiation control signal. The molecular and genetic basis of asymmetric cell divisions has also been studied in green algae of the genus Volvox, a model system for studying how unicellular organisms can evolve into multicellular organisms. In Volvox carteri, the 16 cells in the anterior hemisphere of a 32-cell embryo divide asymmetrically, each producing one large and one small daughter cell. The size of the cell at the end of all cell divisions determines whether it becomes a specialized germ or somatic cell.
Epigenetic control of cellular differentiation 
Since each cell, regardless of cell type, possesses the same genome, determination of cell type must occur at the level of gene expression. While the regulation of gene expression can occur through cis- and trans-regulatory elements including a gene’s promoter and enhancers, the problem arises to how this expression pattern is maintained over numerous generations of cell division. As it turns out, epigenetic processes play a crucial role in regulating the decision to adopt a stem, progenitor, or mature cell fate. This section will focus primarily on mammalian stem cells.
Importance of epigenetic control 
The first question that can be asked is the extent and complexity of the role of epigenetic processes in the determination of cell fate. A clear answer to this question can be seen in the 2011 paper by Lister R, et al.  on aberrant epigenomic programming in human induced pluripotent stem cells. As induced pluripotent stem cells (iPSCs) are thought to mimic embryonic stem cells in their pluripotent properties, few epigenetic differences should exist between them. To test this prediction, the authors conducted whole-genome profiling of DNA methylation patterns in several human embryonic stem cell (ESC), iPSC, and progenitor cell lines.
Female adipose cells, lung fibroblasts, and foreskin fibroblasts were reprogrammed into induced pluripotent state with the OCT4, SOX2, KLF4, and MYC genes. Patterns of DNA methylation in ESCs, iPSCs, somatic cells were compared. Lister R, et al. observed significant resemblance in methylation levels between embryonic and induced pluripotent cells. Around 80% of CG dinucleotides in ESCs and iPSCs were methylated, the same was true of only 60% of CG dinucleotides in somatic cells. In addition, somatic cells possessed minimal levels of cytosine methylation in non-CG dinucleotides, while induced pluripotent cells possessed similar levels of methylation as embryonic stem cells, between 0.5 and 1.5%. Thus, consistent with their respective transcriptional activities, DNA methylation patterns, at least on the genomic level, are similar between ESCs and iPSCs.
However, upon examining methylation patterns more closely, the authors discovered 1175 regions of differential CG dinucleotide methylation between at least one ES or iPS cell line. By comparing these regions of differential methylation with regions of cytosine methylation in the original somatic cells, 44-49% of differentially methylated regions reflected methylation patterns of the respective progenitor somatic cells, while 51-56% of these regions were dissimilar to both the progenitor and embryonic cell lines. In vitro-induced differentiation of iPSC lines saw transmission of 88% and 46% of hyper and hypo-methylated differentially methylated regions, respectively.
Two conclusions are readily apparent from this study. First, epigenetic processes are heavily involved in cell fate determination, as seen from the similar levels of cytosine methylation between induced pluripotent and embryonic stem cells, consistent with their respective patterns of transcription. Second, the mechanisms of de-differentiation (and by extension, differentiation) are very complex and cannot be easily duplicated, as seen by the significant number of differentially methylated regions between ES and iPS cell lines. Now that these two points have been established, we can examine some of the epigenetic mechanisms that are thought to regulate cellular differentiation.
Mechanisms of epigenetic regulation 
Three transcription factors, OCT4, SOX2, and NANOG – the first two of which are used in iPSC reprogramming – are highly expressed in undifferentiated embryonic stem cells and are necessary for the maintenance of their pluripotency. It is thought that they achieve this through alterations in chromatin structure, such as histone modification and DNA methylation, to restrict or permit the transcription of target genes.
In the realm of gene silencing, Polycomb repressive complex 2, one of two classes of the Polycomb group (PcG) family of proteins, catalyzes the di- and tri-methylation of histone H3 lysine 27 (H3K27me2/me3). By binding to the H3K27me2/3-tagged nucleosome, PRC1 (also a complex of PcG family proteins) catalyzes the mono-ubiquitinylation of histone H2A at lysine 119 (H2AK119Ub1), blocking RNA polymerase II activity and resulting in transcriptional suppression. PcG knockout ES cells do not differentiate efficiently into the three germ layers, and deletion of the PRC1 and PRC2 genes leads to increased expression of lineage-affiliated genes and unscheduled differentiation. Presumably, PcG complexes are responsible for transcriptionally repressing differentiation and development-promoting genes.
Alternately, upon receiving differentiation signals, PcG proteins are recruited to promoters of pluripotency transcription factors. PcG-deficient ES cells can begin differentiation but cannot maintain the differentiated phenotype. Simultaneously, differentiation and development-promoting genes are activated by Trithorax group (TrxG) chromatin regulators and lose their repression. TrxG proteins are recruited at regions of high transcriptional activity, where they catalyze the trimethylation of histone H3 lysine 4 (H3K4me3) and promote gene activation through histone acetylation. PcG and TrxG complexes engage in direct competition and are thought to be functionally antagonistic, creating at differentiation and development-promoting loci what is termed a “bivalent domain” and rendering these genes sensitive to rapid induction or repression.
Regulation of gene expression is further achieved through DNA methylation, in which the DNA methyltransferase-mediated methylation of cytosine residues in CpG dinucleotides maintains heritable repression by controlling DNA accessibility. The majority of CpG sites in embryonic stem cells are unmethylated and appear to be associated with H3K4me3-carrying nucleosomes. Upon differentiation, a small number of genes, including OCT4 and NANOG, are methylated and their promoters repressed to prevent their further expression. Consistently, DNA methylation-deficient embryonic stem cells rapidly enter apoptosis upon in vitro differentiation.
Role of signaling in epigenetic control 
A final question to ask concerns the role of cell signaling in influencing the epigenetic processes governing differentiation. Such a role should exist, as it would be reasonable to think that extrinsic signaling can lead to epigenetic remodeling, just as it can lead to changes in gene expression through the activation or repression of different transcription factors. Interestingly, little direct data is available concerning the specific signals that influence the epigenome, and the majority of current knowledge consist of speculations on plausible candidate regulators of epigenetic remodeling. We will first discuss several major candidates thought to be involved in the induction and maintenance of both embryonic stem cells and their differentiated progeny, and then turn to one example of specific signaling pathways in which more direct evidence exists for its role in epigenetic change.
The first major candidate is Wnt signaling pathway. The Wnt pathway is involved in all stages of differentiation, and the ligand Wnt3a can substitute for the overexpression of c-Myc in the generation of induced pluripotent stem cells. On the other hand, disruption of ß-catenin, a component of the Wnt signaling pathway, leads to decreased proliferation of neural progenitors.
Growth factors comprise the second major set of candidates of epigenetic regulators of cellular differentiation. These morphogens are crucial for development, and include bone morphogenetic proteins, transforming growth factors (TGFs), and fibroblast growth factors (FGFs). TGFs and FGFs have been shown to sustain expression of OCT4, SOX2, and NANOG by downstream signaling to Smad proteins. Depletion of growth factors promotes the differentiation of ESCs, while genes with bivalent chromatin can become either more restrictive or permissive in their transcription.
Several other signaling pathways are also considered to be primary candidates. Cytokine leukemia inhibitory factors are associated with the maintenance of mouse ESCs in an undifferentiated state. This is achieved through its activation of the Jak-STAT3 pathway, which has been shown to be necessary and sufficient towards maintaining mouse ESC pluripotency. Retinoic acid can induce differentiation of human and mouse ESCs, and Notch signaling is involved in the proliferation and self-renewal of stem cells. Finally, Sonic hedgehog, in addition to its role as a morphogen, promotes embryonic stem cell differentiation and the self-renewal of somatic stem cells.
The problem, of course, is that the candidacy of these signaling pathways was inferred primarily on the basis of their role in development and cellular differentiation. While epigenetic regulation is necessary for driving cellular differentiation, they are certainly not sufficient for this process. Direct modulation of gene expression through modification of transcription factors plays a key role that must be distinguished from heritable epigenetic changes that can persist even in the absence of the original environmental signals. Only a few examples of signaling pathways leading to epigenetic changes that alter cell fate currently exist, and we will focus on one of them.
Expression of Shh (Sonic hedgehog) upregulates the production of Bmi1, a component of the PcG complex that recognizes H3K27me3. This occurs in a Gli-dependent manner, as Gli1 and Gli2 are downstream effectors of the Hedgehog signaling pathway. In culture, Bmi1 mediates the Hedgehog pathway’s ability to promote human mammary stem cell self-renewal. In both humans and mice, researchers showed Bmi1 to be highly expressed in proliferating immature cerebellar granule cell precursors. When Bmi1 was knocked out in mice, impaired cerebellar development resulted, leading to significant reductions in postnatal brain mass along with abnormalities in motor control and behavior. A separate study showed a significant decrease in neural stem cell proliferation along with increased astrocyte proliferation in Bmi null mice.
In summary, the role of signaling in the epigenetic control of cell fate in mammals is largely unknown, but distinct examples exist that indicate the likely existence of further such mechanisms.
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