When a proliferating myoblast culture is induced to differentiate by deprivation of serum in the medium, a significant proportion of cells escape from terminal differentiation, while the rest of the cells differentiate. Using C2C12 mouse myoblast cells, this heterogeneity observed upon differentiation was investigated with an emphasis on the myogenic regulatory factors. The differentiating part of the cell population followed a series of well-described events, including expression of myogenin, p21(WAF1), and contractile proteins, permanent withdrawal from the cell cycle and cell fusion, whereas the rest of the cells did not initiate any of these events. Interestingly, the latter cells showed an undetectable or greatly reduced level of MyoD and Myf-5 expression, which had been originally expressed in the undifferentiated proliferating myoblasts. When these undifferentiated cells were isolated and returned to the growth conditions, they progressed through the cell cycle and regained MyoD expression. These cells demonstrated identical features with the original culture on the deprivation of serum. They produced both MyoD-positive differentiating and MyoD-negative undifferentiated populations once again. Thus the undifferentiated cells in the serum-deprived culture were designated ‘reserve cells’. Upon serum deprivation, MyoD expression rapidly decreased as a result of down-regulation in approximately 50% of the cells. After this heterogenization, MyoD positive cells expressed myogenin, which is the earliest known event of terminal differentiation and marks irreversible commitment to this, while MyoD-negative cells did not differentiate and became the reserve cells. We also demonstrated that ectopic expression of MyoD converted the reserve cells to differentiating cells, indicating that down-regulation of MyoD is a causal event in the formation of reserve cells.