Determination and differentiation of skeletal muscle precursors requires cell-cell contact, but the full range of cell surface proteins that mediate this requirement and the mechanisms by which they work are not known. To identify participants in cell contact-mediated regulation of myogenesis, genes that encode secreted proteins specifically upregulated during differentiation of C2C12 myoblasts were identified by the yeast signal sequence trap method (K. A. Jacobs, L. A. Collins-Racie, M. Colbert, M. Duckett, M. Golden-Fleet, K. Kelleher, R. Kriz, E. R. La Vallie, D. Merberg, V. Spaulding, J. Stover, M. J. Williamson, and J. M. McCoy, Gene 198:289-296, 1997), followed by RNA expression analysis. We report here the identification of CD164 as a gene expressed in proliferating C2C12 cells that is upregulated during differentiation. CD164 encodes a widely expressed cell surface sialomucin that has been implicated in regulation of cell proliferation and adhesion during hematopoiesis. Stable overexpression of CD164 in C2C12 and F3 myoblasts enhanced their differentiation, as assessed by both morphological and biochemical criteria. Furthermore, expression of antisense CD164 or soluble extracellular regions of CD164 inhibited myogenic differentiation. Treatment of C2C12 cells with sialidase or O-sialoglycoprotease, two enzymes previously reported to destroy functional epitopes on CD164, also inhibited differentiation. These data indicate that (i) CD164 may play a rate-limiting role in differentiation of cultured myoblasts, (ii) sialomucins represent a class of potential effectors of cell contact-mediated regulation of myogenesis, and (iii) carbohydrate-based cell recognition may play a role in mediating this phenomenon.