Tumor necrosis factor-alpha (TNF-alpha) has long been known to mediate skeletal muscle protein catabolism as a humoral factor. However, recent findings that muscle normally synthesizes TNF-alpha and that strenuous exercise increases circulating TNF-alpha in healthy individuals raised the possibility that this cytokine may also have a physiological role in skeletal muscle. In this study, we observed a basal level of TNF-alpha expression in C2C12 myoblasts that was markedly up-regulated by serum restriction. Serum restriction also increased nuclear factor-kappaB (NF-kappaB) activity, which could be blocked by a TNF-alpha-neutralizing antibody. This antibody also inhibited the expression of a differentiation marker, adult fast myosin heavy chain, during the initial 24 h of serum restriction. Conversely, fast myosin heavy chain expression was stimulated by exogenous TNF-alpha during the same time period, which could be blocked by a dominant negative inhibitor of NF-kappaB activation. TNF-alpha rapidly stimulated the binding activity of serum response factor (SRF), a transcription factor required for myoblast differentiation, and expression of the SRF-dependent skeletal muscle alpha-actin gene. These results demonstrate for the first time that TNT-alpha is an endogenous muscle factor that promotes the early phase of differentiation by stimulating NF-kappaB and SRF activity.