Gangliosides appear to be important recognition molecules on the cell surface and have been implicated as receptors for certain bacterial toxins and viruses. Little is known, however, about their normal physiological roles(s). We used the B or binding subunit of cholera toxin as a specific probe for surface GM1. The only known function of the B subunit, which is multivalent, is to bind to the oligosaccharide chain of GM1. Exposure of quiescent cells to the B subunit results in a proliferative response. In contrast, exposure of growing cells to the B subunit leads to an inhibition of cell growth. Rat glioma C6 cells which are deficient in GM1 are not affected by the B subunit. When exogenous GM1 is incorporated into their plasma membranes, the cells are to bind the B subunit and their growth is inhibited. Thus, gangliosides appear to be bimodal membrane transducters of growth regulatory signals. NIH 3T3 cells transformed by various oncogenes exhibit a reduction in complex gangliosides. When their growth is inhibited by dibutyryl cyclic AMP, there is and increase in ganglioside expression, further supporting a relationship between gangliosides and cell growth. In addition, cells transformed by ras oncogenes display alterations is phospholipid metabolism. In contrast to normal cells or cells transformed by a ras proto-oncogene, the former cells do not breakdown phosphatidylinositol-bisphosphate to inositol trisphophate and diacylglycerol upon serum stimulation. The cells do respond to aluminum fluoride indicating the regulatory G protein/phospholipase C complex was not defective. Inhibition of cell growth with dibutyryl cyclic AMP does not restore the response. Thus, loss of response to growth factors is not due to the growth state of the cells.