How might the DNA-RNA-protein pathway affect cellular differentiation? For example, cells in the interior of the body may be signaled by genes to become either muscle or connective tissues, while other cells on the exterior of the body will be signaled to become epithelial cells.

The differentiation is based on a set of activation / inactivation of genes (parts of DNA) via complex cascades of regulation. We can not consider a differentiating cell individually. Indeed, its "expression profile" depends on its environment: cell-cell interactions, cell-matrix. It is these extra-cellular signals that will trigger the internal regulation signals. The establishment of plans for the organization of a Drosophila embryo or the development of limb buds in mice are well-known models. In these models, so-called "positional" information plays a large role: a substance present in the form of a concentration gradient in the extracellular medium will trigger or not intracellular signals depending on the dose at which the cells are exposed along this gradient.

Though all the cells of an organism have the same DNA, they utilize the genetic make up differently. Each cell uses specific genes in the chromosome and "turns off" the genes they are not using. Therefore the DNA maybe the same, but each sell has different RNA, thus different protein molecules are produced.

Explanation:

The process of cellular differentiation is when similar and unspecialized cells produced during the division of a zygote become different and specialized. Example, cells in the liver and kidneys have the same DNA, but they use the DNA in different ways thus have different RNA and different protein molecules, thus performing different functions.