The central portion of the midbody, a cytoplasmic bridge between nascent daughter cells at the end of cell division, has generally been thought to be retained by one of the daughter cells, but has, recently, also been shown to be released into the extracellular space. The significance of midbody-retention versus -release is unknown. Here we show, by quantitatively analysing midbody-fate in various cell lines under different growth conditions, that the extent of midbody-release is significantly greater in stem cells than cancer-derived cells. Induction of cell differentiation is accompanied by an increase in midbody-release. Knockdown of the endosomal sorting complex required for transport family members, Alix and tumour-suppressor gene 101, or of their interaction partner, centrosomal protein 55, impairs midbody-release, suggesting mechanistic similarities to abscission. Cells with such impaired midbody-release exhibit enhanced responsiveness to a differentiation stimulus. Taken together, midbody-release emerges as a characteristic feature of cells capable of differentiation.