C38 antigen is specifically expressed in neuronal cells of the retina. The purpose of this study was to isolate C38 cDNA and determine its molecular functions. Sequence analysis of C38 cDNA revealed that C38 is equivalent to rat BM88, which has been reported to induce cell-cycle arrest and neuronal differentiation in Neuro2a cells. C38 and Ki67, a marker of proliferating cells, were not colocalized during retinal development. C38 was first detected in the retinal ganglion cells at embryonic day 16, much later than the expression of doublecortin, a marker of immature neurons. Although all the horizontal cells were post-mitotic at this stage, C38 was not detected in horizontal cells until the postnatal period. In addition, C38 over-expression did not induce neuronal differentiation or cell-cycle arrest of pluripotent P19 embryonal carcinoma cells. Instead, C38 promoted maturation during neuronal differentiation of P19 embryonal carcinoma cells by down-regulating Oct-3, a pluripotent cell marker and enhancing the expressions of positive regulators of neurogenesis. In conclusion, during retinal development, C38 is first expressed in post-mitotic retinal neurons and is up-regulated during their maturation. C38 does not induce neuronal competence in pluripotent cells, but does promote maturation in already committed neuronal cells.