Studies characterized the structure and function of epidermal growth factor (EGF) receptors in astrocytic glial cells and neuronal cells in primary culture from neonatal rat brain. [125I]EGF binding to membranes prepared from glial and neuronal cultures was specific and dependent on protein concentration; however, glial preparations bound 5-fold more [125I]EGF per mg protein. Unlabeled EGF competed for binding to both glial and neuronal membranes with an IC50 of 5 nM, whereas insulin, insulin-like growth factor I, and nerve growth factor failed to compete. Scatchard plot analysis of binding data for glial cells yielded a curvilinear plot with dissociation constants of 7.12 nM for high affinity and 6.2 microM for low affinity sites. The higher level of binding in glial compared to neuronal membranes reflected a greater number of binding sites rather than differences in receptor affinity. In glial membranes, [125I]EGF covalently cross-linked to one major protein with a mol wt of 170,000, and EGF stimulated the phosphorylation of a 170,000 protein which was half-maximal at 20 nM. In contrast, neither covalent cross-linking nor receptor autophosphorylation could be detected in neuronal membranes. Culture of glial cells in the presence of EGF stimulated [35S]methionine incorporation into both cellular and secreted proteins, whereas no effect of EGF was observed in neuronal cultures. The addition of EGF to glial cultures produced a dose-dependent stimulation of [3H]thymidine incorporation as well as the multiplication of cells over a 6-day period. These observations show that functional EGF receptors in the neonatal brain are predominantly localized in glial cells.