The immortalization of progenitor cells from embryonic murine hippocampus using oncogene-carrying retroviral vectors is described. Use of a vector encoding the oncogene v-myc results in lines of nestin-positive progenitor cells. Limited differentiation ensues if the cells are cultured in the presence of dibutyryl cyclic adenosine monophosphate. In contrast, use of a vector in which the extracellular portion of the epidermal growth factor (EGF) receptor is fused to the neu tyrosine kinase generates lines of pluripotential nestin-positive progenitor cells, which differentiate upon withdrawal of EGF into neurons and glia. Differentiated neurons expressing action potentials and neurotransmitter receptors make up a high proportion of the cells. These cell lines are useful tools to investigate the characteristics of differentiating neurons and glia, as well as to screen neuroactive drugs. This work has been reported in preliminary form as an abstract (1996 Society for Neuroscience Abstract, #606.20, p. 1537).