The antiepileptic drug valproic acid (VPA) is teratogenic, because it induces birth defects in some children of mothers treated for epilepsy. Cellular and molecular actions associated with teratogenicity were identified by testing differentiation of F9 embryocarcinoma cells. VPA altered cell morphology and delayed proliferation. Specific differentiation markers (e.g., c-fos and keratin 18 mRNA and particularly the activating protein-2 transcription factor protein) were induced. This pattern differs from the pattern induced by other teratogens or F9 cell-differentiating agents. Induction of differentiation correlated with teratogenicity because teratogenic derivatives of VPA, such as (S)-4-yn-VPA, induced differentiation, whereas closely related nonteratogenic compounds, such as (R)-4-yn-VPA, 2-en-VPA, and 4-methyl-VPA, did not. In the cellular signaling network, the peroxisome proliferator-activated receptor delta (PPARdelta) was activated selectively by VPA and teratogenic derivatives. Depletion of PPARdelta by antisense RNA expression precluded the response of F9 cells to VPA. In conclusion, our data show that VPA and its teratogenic derivatives induce a specific type of F9 cell differentiation and that PPARdelta is a limiting factor in the control of differentiation.