Cellular differentiation is the process in which a cell changes from one cell type to another. Usually, the cell changes to a more specialized type. Differentiation occurs numerous times during the development of a multicellular organism as it changes from a simple zygote to a complex system of tissues and cell types. Differentiation continues in adulthood as adult stem cells divide and create fully differentiated daughter cells during tissue repair and during normal cell turnover. Some differentiation occurs in response to antigen exposure. Differentiation dramatically changes a cell's size, shape, membrane potential, metabolic activity, and responsiveness to signals. These changes are largely due to highly controlled modifications in gene expression and are the study of epigenetics. With a few exceptions, cellular differentiation almost never involves a change in the DNA sequence itself. Although metabolic composition does get altered quite dramatically where stem cells are characterized by abundant metabolites with highly unsaturated structures whose levels decrease upon differentiation. Thus, different cells can have very different physical characteristics despite having the same genome.
A specialized type of differentiation, known as 'terminal differentiation', is of importance in some tissues, for example vertebrate nervous system, striated muscle, epidermis and gut. During terminal differentiation, a precursor cell formerly capable of cell division, permanently leaves the cell cycle, dismantles the cell cycle machinery and often expresses a range of genes characteristic of the cell's final function (e.g. myosin and actin for a muscle cell). Differentiation may continue to occur after terminal differentiation if the capacity and functions of the cell undergo further changes.
Among dividing cells, there are multiple levels of cell potency, the cell's ability to differentiate into other cell types. A greater potency indicates a larger number of cell types that can be derived. A cell that can differentiate into all cell types, including the placental tissue, is known as totipotent. In mammals, only the zygote and subsequent blastomeres are totipotent, while in plants, many differentiated cells can become totipotent with simple laboratory techniques. A cell that can differentiate into all cell types of the adult organism is known as pluripotent. Such cells are called meristematic cells in higher plants and embryonic stem cells in animals, though some groups report the presence of adult pluripotent cells. Virally induced expression of four transcription factors Oct4, Sox2, c-Myc, and Klf4 (Yamanaka factors) is sufficient to create pluripotent (iPS) cells from adult fibroblasts. A multipotent cell is one that can differentiate into multiple different, but closely related cell types. Oligopotent cells are more restricted than multipotent, but can still differentiate into a few closely related cell types. Finally, unipotent cells can differentiate into only one cell type, but are capable of self-renewal. In cytopathology, the level of cellular differentiation is used as a measure of cancer progression. "Grade" is a marker of how differentiated a cell in a tumor is.