Schlafen-3 (Slfn-3), a novel gene, has been shown to be a negative regulator of proliferation. The current investigation was undertaken to determine whether Slfn-3 might play a role in regulating cellular differentiation. Butyric acid, a short chain fatty acid, which induced differentiation of intestinal cells as evidenced by increased alkaline phosphatase (ALP) activity in the rat small intestinal IEC-6 cells, also produced a marked increase in Slfn-3 expression. Furthermore, overexpression of Slfn-3 caused stimulation of ALP activity in IEC-6 cells, which was exacerbated by butyrate. On the other hand, downregulation of Slfn-3 by slfn-3-si-RNA greatly attenuated the butyrate-mediated induction of differentiation of IEC-6 cells. Additionally, we observed that increased expression of Slfn-3 in colon cancer HCT-116 cells stimulated TGF-beta expression and modulated expression of its downstream effectors as evidenced by increased expression of p27kip1 and downregulation of CDK-2. In addition, Slfn-3 increases E-cadherin expression but downregulates beta-catenin. In conclusion, our data show that Slfn-3 plays a critical role in regulating intestinal mucosal differentiation. Furthermore our data also show that TGF-beta signaling pathway plays an important role in mediating slfn-3 induced differentiation. Published by Elsevier Inc.