The B subunit of cholera toxin, a protein which binds specifically to cell surface ganglioside GM1, has been shown to have a bimodal effect on DNA synthesis in Swiss 3T3 fibroblasts. The B subunit induced cellular proliferation of confluent and quiescent cells while it inhibited the growth of the same cells when they were sparse and rapidly dividing. The amount of cell surface GM1 increased when the cells reached confluency. To examine the hypothesis that the variation in levels of GM1 was responsible for the bimodal effect, we increased GM1 levels in rapidly dividing cells by insertion of exogenous GM1 or by treatment of the cells with neuraminidase to convert polysialogangliosides to GM1. Even after the level of GM1 was increased to levels similar to those found in confluent cells, the B subunit still inhibited, rather than stimulated, their growth. Therefore, this result indicates that the bimodal response to the B subunit is not solely a function of the concentration of cell surface GM1; rather it is the growth stage that determines the fate of the signal transduced by the interaction of the B subunit and ganglioside GM1.