CADM1 is a multifunctional cell adhesion molecule expressed predominantly in the nerve system, testis and lung. The expression of the Cadm1 gene is induced during the neural differentiation of murine embryonal carcinoma P19 cells by treatment with retinoic acid (RA). Here, we show that the suppression of CADM1 expression using RNAi interfered with P19 cell aggregation and reduced cell populations expressing MAP2 after RA treatment. Non aggregated P19 cells were not differentiated into neurons, suggesting that CADM1 participates in the aggregate formation and neuronal differentiation of P19 in vitro. A luciferase assay of a series of deletion mutants of the CADM1 promoter localized an RA-responsive cis-acting element to an approximately 90-bp fragment upstream of the translational start site. This element contains a putative binding site for transcription factor Sp1, named Sp1-binding site-1 (Sp1BS-1). Sp1BS-1 and adjacent Sp1-binding sites (Sp1BS-2 and Sp1BS-3) showed enhanced transcriptional activity by RA. Moreover, a chromatin immunoprecipitation showed that RA receptor (RAR)α was associated with a DNA fragment containing Sp1BS-1, whereas suppression of RARα expression using siRNA reduced the responsiveness of the CADM1 promoter to RA. These results suggest that Sp1 plays a critical role in RA-induced CADM1 expression through possible interaction with RARα in the neural differentiation of P19.