Placental development results from a highly dynamic differentiation program. We used DNA microarray analysis to characterize the process by which human cytotrophoblast cells differentiate into syncytiotrophoblast cells in a purified cell culture system. Of 6,918 genes analyzed, 141 genes were induced and 256 were downregulated by more than 2-fold. Dynamically regulated genes were divided by the K-means algorithm into 9 kinetic pattern groups, then by biologic classification into 6 overall functional categories: cell and tissue structural dynamics, cell cycle and apoptosis, intercellular communication, metabolism, regulation of gene expression, and expressed sequence tag (EST) and function unknown. Gene expression changes within key functional categories were tightly coupled to morphological changes. In several key gene function categories, such as cell and tissue structure, many gene members of the category were strongly activated while others were strongly repressed. These findings suggest that differentiation is augmented by "categorical reprogramming" in which the function of induced genes is enhanced by preventing the further synthesis of categorically related gene products.