Early gastrula-stage Drosophila embryo cells will differentiate in vitro to form several cell types, including neurons. We report here the morphological appearance of cultured embryo cells, the pattern of DNA synthesis, and the expression of neurotransmitter-metabolizing macromolecules. The cells initially exhibit no overt morphological differentiation, and all cells incorporate 3H-thymidine following a 1 hr pulse-labeling period. As cells undergo morphological differentiation, fewer total cells as well as qualitatively different cell types incorporate label. By the time cells are 8 or 9 hr old, no myocytes or myotubes are labeled. In contrast, some neurons are labeled with a thymidine pulse as late as 18 hr. We have also stained cultured cells of various developmental ages with the insect neuron-specific antibody: anti-HRP. Some positive cells can be detected as early as 5 hr, when no overt morphological differentiation is apparent. As the cells differentiate, the staining is limited to the small, round neuronal type and its processes. These findings suggest that this neuron-specific cell marker is expressed very early in cultured gastrula-stage cells and may be used to identify neuronal precursor cells. We have studied the patterns of expression of several macromolecules involved in acetylcholine metabolism using these cultures. The appearance of choline acetyltransferase (ChAT), the biosynthetic enzyme for ACh production, is first detected in 5-hr-old cells. There is an initial phase of low-level expression, followed by a rapid rise in activity shortly after the differentiating neuron clusters make contact with one another. ChAT activity reaches a plateau in 36-48-hr-old cells. Acetylcholinesterase activity can be detected several hours before ChAT and also shows a period of low-level expression followed by a rapidly increasing phase, reaching a plateau at around 36-48 hr. 125I-alpha-bungarotoxin binding appears in cells about 4 hr old and rapidly approaches maximum levels by about 36 hr. The in vitro expression pattern for ChAT and AChE is similar to that seen in vivo. AChE activity has been localized histochemically to the neurons and their processes in vitro. The normal in vitro expression pattern for ChAT and AChE can be altered by adding various cholinergic drugs to the culture medium during cell differentiation. Medium conditioned by older cultures can also result in lower levels of ChAT and AChE expression.(ABSTRACT TRUNCATED AT 250 WORDS)