We generated a new cell line, N38, by conditionally immortalizing mouse oligodendrocytes (OLs) at early stages of maturation. The morphology and marker expression pattern suggest N38 cells are similar to immature OLs. N38 cells were sensitive to changes in serum concentrations, and forcing the cells to differentiate in low serum at 39 degrees C significantly decreased the survival of the cells. Importantly, addition of PDGFaa, bFGF or astrocyte-conditioned medium had protective effects on the cells, by increasing cell proliferation but not cell differentiation. This effect was receptor-mediated. Exposure of N38 cells to differentiating signals such as retinoic acid did not cause further differentiation of the cells. The N38 cell line expresses the vertebrate homolog of the Drosophila notch-1 receptor, a molecule that appears to regulate OL differentiation. Notch-1 receptor was homogeneously distributed in the somas of N38 cells. Incubation of N38 cells with either PDGFaa or bFGF, however, induced a polarized distribution of the receptor in the majority of the cells as well as an upregulation of receptor protein levels. The upregulation of molecules, such the notch-1 receptor, in pathways that control differentiation might be an important mechanism for keeping OL precursors in an undifferentiated state during their exit of the germinal layer and migration in the developing central nervous system. This OL cell line might constitute a suitable model for studies of regulatory mechanisms at this stage of OL differentiation.