It has been shown previously that Dictyostelium discoideum NC4 cells dissociated at the early aggregation stage form cell clumps and differentiate into prespore cells in a shaking culture containing glucose, albumin, EDTA and cyclic AMP. In this culture system, we found that the cells neither differentiate nor form cell clumps in the absence of cyclic AMP. Wheat-germ agglutinin (WGA) completely inhibited the cyclic AMP-induced formation of cell contact and the inhibition was nullified by the addition of N-acetyl-D-glucosamine. When the cells were prevented from forming contact by either rapid shaking or the addition of WGA, they were unable to differentiate even in the presence of cyclic AMP, indicating that contact formation is a prerequisite for prespore differentiation. Cells dissociated from migrating slugs formed cell clumps in shaking culture, with or without cyclic AMP, and the cell contact was sensitive to WGA. In the absence of cyclic AMP, prespore cells lost their differentiated state, even though the cells were in contact. This indicates that cyclic AMP has a second effect, that of pomoting differentiation, in addition to the effect of inducing contact formation. Both effects were required for prespore differentiation of strain NC4 cells.