Cyclooxygenase (COX) is a key enzyme in the conversion of arachidonic acid into prostanoids which participate in various cellular functions including apoptosis, mitogenesis, inflammation, immune modulation and differentiation. Moreover, the synthetic glucocorticoid, dexamethasone has immune modulating and anti-inflammatory effects in vivo. Recently, dexamethasone was found to enhance retinoic acid-induced neuronal differentiation. In this study, we investigated the mechanisms of dexamethasone-mediated neuronal differentiation. Immunoblotting and morphological analysis demonstrated that dexamethasone induced neuronal differentiation through COX 1 induction. This phenomenon was inhibited by indomethacin, a COX inhibitor. In addition, the addition of exogenous prostaglandin E2 (PGE2), a substance produced by the COX-mediated pathway, triggered neurite outgrowth of cells treated with COX inhibitor. Taken together, COX 1 appears to play an important role in dexamethasone-mediated neuronal differentiation.