We observed that retinoic acid, which differentiates the human neuroblastoma SK‐N‐BE into mature neurons, induced an elevation in levels of polyunsaturated fatty acids, especially arachidonic acid (20:4 n‐6). This effect was not induced by phorbol myristate acetate, another differentiating agent. We then explored the effects of retinoic acid on the formation of arachidonic acid and of docosahexaenoic acid from precursors and on the de novo lipid synthesis from acetate at various stages of differentiation, which was assessed by morphological (cell number and neurite outgrowth) and biochemical (protein content and thymidine incorporation) criteria. At 3 days of incubation with retinoic acid, in the n‐6 series, total conversion of linoleic acid, especially to 20:3 n‐6, was elevated, in association with preferential incorporation of acetate into phospholipids; in contrast, at 8 days, synthesis of 20‐carbon polyunsaturated fatty acids declined, in association with enhanced incorporation in triglycerides. In the n‐3 series, eicosapentaenoic acid was converted to docosahexaenoic acid in SK‐N‐BE, but the conversion was not affected by retinoic acid. During the early stage of neuronal differentiation, therefore, enhanced production of 20‐carbon polyunsaturated fatty acids from their precursors occurred, and newly formed fatty acids were preferentially incorporated in phospholipids, possibly in association with membrane deposition. When differentiation was completed, arachidonic acid formation and incorporation of acetate in phospholipids and cholesterol declined with enhanced labeling of storage lipids.