We prove that the locally convex space $C_{p}(X)$ of continuous real-valued functions on a Tychonoff space $X$ equipped with the topology of pointwise convergence is distinguished if and only if $X$ is a $Delta$-space in the sense of cite {Knight}. As an application of this characterization theorem we obtain the following results: 1) If $X$ is a v{C}ech-complete (in particular, compact) space such that $C_p(X)$ is distinguished, then $X$ is scattered. 2) For every separable compact space of the Isbell--Mrowka type $X$, the space $C_p(X)$ is distinguished. 3) If $X$ is the compact space of ordinals $[0,omega_1]$, then $C_p(X)$ is not distinguished. We observe that the existence of an uncountable separable metrizable space $X$ such that $C_p(X)$ is distinguished, is independent of ZFC. We explore also the question to which extent the class of $Delta$-spaces is invariant under basic topological operations.
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