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Interleukin-1β (IL-1β) is a pleiotropic cytokine that can induce several cellular signal transduction pathways. Here, we show that IL-1β can induce cell cycle arrest and differentiation in the human medullary thyroid carcinoma (MTC) cell line, TT. IL-1β induces cell cycle arrest accompanied by morphological changes and expression of the neuroendocrine marker calcitonin. These changes are blocked by the MEK1/2 specific inhibitor U0126, indicating that MEK1/2 is essential for IL-1β signaling in TT cells. IL-1β induces expression of leukemia inhibitory factor (LIF) and activation of STAT3 via the MEK/ERK pathway. This activation of STAT3 could be abrogated by treatment with anti-LIF neutralizing antibody or anti-gp130 blocking antibody, indicating that induction of LIF expression is sufficient and essential for STAT3 activation by IL-1β. In addition to activation of the LIF/JAK/STAT pathway, IL-1β also induced an MEK/ERK-mediated intracellular cell-autonomous signaling pathway that is independently sufficient for growth arrest and differentiation. Thus, IL-1β activates the MEK/ERK pathway to induce growth arrest and differentiation in MTC cells via dual independent signaling mechanisms, the cell-extrinsic LIF/JAK/STAT pathway, and the cell-intrinsic autonomous signaling pathway.