We have used a combination of immunocytochemical and electrophysiological measurements to monitor the differentiation of cerebellar granule cells in vitro. We present immunocytochemical evidence showing that several characteristic features of developing rat cerebellar tissue were retained in postnatal explant cultures. Most notably the cultures expressed radiating GFAP-positive (Bergmann) glia processes, proliferating NSE-negative neuroblasts, and migrating NSE-positive granule cells. The latter were subdivided into 3 developmental stages--i.e., immature, intermediate, and mature granule cells, based upon cell differences in location from the explant, intensity of NSE staining, excitability, and the amplitude of voltage-dependent conductances. Immature cells were identifiable during the first week in culture and were located up to 140 micron from the explant. These cells stained lightly for NSE and displayed conductances of insufficient magnitude to generate action potentials. Intermediate cells were present after 1-2 weeks in culture and were located up to 500 micron from the explant. These cells were also NSE positive and were characterized by the presence of soma action potentials. Intermediate cells displayed 3 large voltage-dependent conductances: a transient, TTX-sensitive inward current; a delayed, TEA-sensitive outward current; and a transient, 4AP-sensitive outward current. Mature cells were present after 1 month in culture and, like intermediate cells, were no more than 500 micron from the explant. However, mature cells stained more intensely for NSE, and the somata of these cells were devoid of voltage-dependent conductances (although axonal currents were usually present). These results indicate that granule cells undergo a stereotypic sequence of differentiation in postnatal explant cultures. These stages may correspond to developmental changes in granule cells during migration into the (internal) granular cell layer in vivo.