Sequential cleavages of APP by β-secretase and γ-secretase release β-amyloid (Aβ) and one secreted form of APP (sAPP-β) in Alzheimer's disease (AD). Alternatively, in non-pathological situations, APP is predominantly cleaved by α-secretase within the amyloid sequence, to release the other soluble form of APP, sAPP-α. However, the functions of the two types of sAPP are still unclear. We performed this study to compare the function of sAPP-α and sAPP-β in differentiation of the glioma cell line U251. We found that sAPP-α suppressed astrocytic differentiation and promoted neuronal differentiation in U251 cells. Additionally, sAPP-α enhanced U251 terminal differentiation into a cholinergic-like neuronal phenotype. In contrast, sAPP-β suppressed neuronal differentiation and promoted the astrocytic differentiation of U251 cells. These findings could not only enrich the knowledge of the potential physiological function of sAPP-α and sAPP-β, but also indicate that they may be connected to the pathological mechanism of AD. Furthermore, these findings suggest that new strategies, such as increasing the level of sAPP-α and/or decreasing the level of sAPP-β in brain, or transplanting stem cells with increased sAPP-α and/or decreased sAPP-β, may have potential value for AD treatment.