N-myc expression is negatively regulated by retinoic acid (RA) which induces the growth arrest and differentiation of neuroblastoma (NB) cells. However, it has not been completely defined whether N-Myc promotes growth and/or antagonises neuronal differentiation of NB cells or whether the down regulation of N-myc occurs as a consequence of the onset of differentiation. By transfecting an N-myc gene construct into these cells, we found that the constitutive overexpression of N-myc stimulated proliferation in RA containing medium and, although these cells were still responsive to RA, they were no longer able to differentiate. Since N-Myc functions appear to be mediated by heterodimerization with Max, the ectopic overexpression of max in NB cells was also investigated. In contrast to N-Myc, Max strongly induced the differentiation by enhancing the effects of RA. Max-transfected cells rapidly arrested growth and differentiated fully within a few days of RA treatment. These findings suggest that the relative levels of N-Myc compared to Max appears to be crucial in stimulating neuroblastoma growth or differentiation, and may contribute to explain the remarkable clinical behaviour of neuroblastomas.