The epigenetic mechanism of folic acid (FA) action on dorsal root ganglion (DRG) cell proliferation and sensory neuron differentiation is not well understood. In this study, the ND7 cell line, derived from DRG cells, was used to elucidate this mechanism. In ND7 cells differentiated with dbcAMP and NGF, Hes1 and Pax3 levels decreased, whereas Neurog2 levels showed a modest increase. Chromatin immunoprecipitation (ChIP) assays examining epigenetic marks at the Hes1 promoter showed that FA favored increased H3K9 and H3K19 acetylation and decreased H3K27 methylation. Hence, FA plays a positive role in cell proliferation. In differentiated ND7 cells, H3K27 methylation decreased, whereas H3K9 and H3K18 acetylation increased at the Neurog2 promoter. FA did not favor this phenotypic outcome. Additionally, in differentiated ND7 Neurog2 associated with the NeuroD1 promoter, FA decreased this association. The results suggest that the switch from proliferation to sensory neuron differentiation in DRG cells is regulated by alterations in epigenetic marks, H3K9/18 acetylation and H3K27 methylation, at Hes1 and Neurog2 promoters, as well as by Neurog2 association with NeuroD1 promoter. FA although positive for proliferation, does not appear to play a role in differentiation.