Cholera toxin (CTX) is composed of two subunits, subunit A, which possesses ADP-ribosyltransferase activity, and subunit B, which is responsible for receptor binding. It has previously been shown that agents that increase cyclic AMP (cAMP) levels in cells induce differentiation of PC12 cells into neurite-like cells. In this report, we show that as little as 100 pg of CTX per ml induces such changes. CTX was found to ADP-ribosylate at least four membrane proteins of PC12 cells in vitro and in vivo and to increase intracellular cAMP levels. We have developed an inducible ctx gene expression system in Vibrio cholerae by using the tac promoter. The culture medium of the CTX-producing bacteria was able to induce the morphological changes and the ADP-ribosylation of the PC12 cell membrane proteins. We have constructed two CTX-cross-reactive mutant proteins (CTX-CRM) by site-directed mutagenesis. The choice of glutamic acid 29 as the target amino acid was based on sequence similarities with other bacterial toxins. CTX-CRM-E29 delta, in which the Glu-29 of the A subunit was deleted, showed strongly reduced ADP-ribosyltransferase activity and did not induce significant morphological changes of PC12 cells. In contrast, CTX-CRM-E29D, in which the Glu-29 was replaced by an aspartic acid, was as active as the wild-type protein. We conclude that the ADP-ribosylation activity of CTX is important for the toxin-induced differentiation of PC12 cells. Pertussis toxin, which had no visible effect on PC12 cell morphology, was also able to ADP-ribosylate a membrane-bound protein(s) in vitro and in vivo. Pertussis toxin alone did not significantly increase cAMP levels in PC12 cells, but it acted synergistically with CTX.