Dividing cells from the midline of the ventral rhombencephalon and medulla oblongata have been transduced with a modulatable oncogene, (ts)SV40-T, using retroviral gene transfer. At the permissive temperature of the oncogene (33 degrees C), cells replicated and were isolated as individual, homogeneous clones. The effects of simply raising the temperature to the oncogene's non-permissive value, namely 39 degrees C, were analyzed by immunohistochemical methods. In one clone in particular (921202-6), cells ceased replication and started to differentiate. Certain neuronal characteristics became apparent: neurone-specific enolase-like immunoreactivity developed, as did the ability to take up exogenously applied 5-hydroxytryptamine (5HT). In addition, the cells took up exogenous 5-hydroxytryptophan (5HTP), and subsequently decarboxylated it to 5HT. However, they were unable to synthesize immunohistochemically detectable amounts of 5HT using L-tryptophan as a precursor. No 5HT uptake was found either in mitotic cells of this clone held at 33 degrees C, or in several other neuronal clones differentiating at 39 degrees C. Neither the neuronal nor the serotoninergic characteristics of clone 921202-6 developed in the presence of retinoic acid. It is concluded that 921202-6 cells differentiate under basal conditions down a neuronal pathway typical of an APUD cell, and that the choice of this pathway is made prior to the end of cell cycling. Furthermore, predisposition of the precursor cells to the neuronal/APUD phenotype can be overridden by extraneous epigenetic factors.