Bipotent glial progenitors have been immortalized by the transfer of the adenovirus E1A gene into primary cultured cells from embryonic rat brain. The lines obtained are phenotypically untransformed, retain growth contact-inhibition, and are able to differentiate, unless they are surtransfected with transforming oncogenes. Depending on the growth conditions, these immortalized cells express differentially either oligodendrocyte or astrocyte-specific markers and genes. After being seeded in serum-free medium, they display gangliosides recognized by A2B5 monoclonal antibody, and then they express sequentially O4 epitopes, galactocerebroside, and the myelin protein DM20. When grown in serum-supplemented medium, the cells express at first A2B5 epitopes, and then transiently O4 and galactocerebroside; after reaching confluence, O4 and galactocerebroside become undetectable, whereas the cells begin to coexpress glial fibrillary acidic protein and glutamine synthetase. These results indicate that the cell lines can undergo a differentiation reminiscent both of O-2A progenitors and of plastic process-bearing glial subpopulations. The cells were also genetically marked by the stable introduction of the nlslacZ reporter gene. Thus, the lines could be useful for studying direct interactions in vitro, or for post-grafting investigations. They should also provide a model for studying the mechanisms involved in the commitment and in the control of proliferation and differentiation of this cell lineage. This suggestion is consistent with the data indicating a growth arrest-dependent differential expression of a novel gene encoding a protein with a helix-loop-helix domain.