Although it is known that most cells of the vertebrate central nervous system (CNS) are derived from the neuroepithelial cells of the neural tube, the factors determining whether an individual neuroepithelial cell develops into a particular type of neurone or glial cell remain unknown. A promising model for studying this problem is the bipotential glial progenitor cell in the developing rat optic nerve; this cell differentiates into a particular type of astrocyte (a type-2 astrocyte) if cultured in 10% fetal calf serum (FCS) and into an oligodendrocyte if cultured in serum-free medium. As the oligodendrocyte-type-2 astrocyte (0-2A) progenitor cell can differentiate along either glial pathway in neurone-free cultures, living axons clearly are not required for its differentiation, at least in vitro. However, the studies on 0-2A progenitor cells were carried out in bulk cultures of optic nerve, and so it was possible that other cell-cell interactions were required for differentiation in culture. We show here that 0-2A progenitor cells can differentiate into type-2 astrocytes or oligodendrocytes when grown as isolated cells in microculture, indicating that differentiation along either glial pathway in vitro does not require signals from other CNS cells, apart from the signals provided by components of the culture medium. We also show that single 0-2A progenitor cells can differentiate along either pathway without dividing, supporting our previous studies using 3H-thymidine and suggesting that DNA replication is not required for these cells to choose between the two differentiation programmes.