Studies on the mechanism of action of nerve growth factor (NGF) were carried out with PC12 rat pheochromocytoma cells. PC12 cells are uniquely useful for such studies because they respond to, but (unlike normal neurons) do not require, NGF and may undergo either generation or regeneration of neurites in response to NGF. Regeneration is defined here as NGF-dependent regrowth of neurites within 24 hr after subculture of NGF-treated PC12 cells. As in cultures of normal NGF-responsive neurons, neurite regeneration by PC12 cells occurs even in the presence of high concentrations of RNA synthesis inhibitors. Generation of neurites is defined as the de novo initiation of outgrowth when PC12 cells are exposed to NGF for the first time. In contrast to regeneration, neurite generation takes place with a lag of at least 24 hr and is blocked by low concentrations of RNA synthesis inhibitors. Such findings suggest that there are both RNA synthesis-dependent and -independent pathways in the mechanism whereby NGF stimulates neurite outgrowth. In addition, NGF-treated PC12 cells undergo a time-dependent loss of the capacity for neurite regeneration after pretreatment with RNA synthesis inhibitors or withdrawal of NGF. Such findings suggest that (i) initiation of neurite outgrowth requires NGF-stimulated, RNA synthesis-dependent accumulation of intracellular material(s), (ii) once such accumulation occurs, RNA synthesis-independent regeneration can occur (but only in the presence of NGF), and (iii) the turnover of such material(s) in the absence of their replacement leads to loss of the capacity for regeneration. A tentative sequence is presented for the events whereby NGF may stimulate neurite outgrowth.