Human term placental cells, isolated by trypsin treatment, were grown in culture with medium 199 and 10% fetal bovine serum for up to 1 week. Aromatase specific activity (+/-SE) of freshly isolated cells was low (0.63 +/- 0.04 pmol/min X mg protein; n = 15) compared to that of placental tissue before trypsin treatment (21.30 +/- 0.40 pmol/min X mg protein; n = 6). This activity in attached cells increased 10-fold 24 h after plating (6.32 +/- 0.75 pmol/min X mg protein; n = 19) and continued to increase up to 72-96 h (14.78 +/- 1.09 pmol/min X mg protein; n = 13) before declining to 6.50 +/- 1.40 pmol/min X mg protein (n = 4) after 120 h. The functional activity of the cells was assessed by daily measurements of hCG secretion into the medium. Secretion of hCG was maintained at about 0.3 micrograms/flask up to 48 h in culture, then rose rapidly to about 6.2 micrograms/flask from 96-168 h. The addition of 1 mM (Bu)2cAMP plus 1 mM theophylline to the culture medium 24 h after plating stimulated hCG secretion 7- to 8-fold relative to that by control cells, had no effect on aromatase specific activity 24 h after its addition, but decreased aromatase activity after 48 h. Freshly prepared cells were primarily (approximately 80%) mononucleated. With time in culture, the number and size of the multinucleated cells increased drastically until they accounted for virtually all of the cellular material in culture at 72 h. These morphological and functional changes in hCG secretion and aromatase activity suggest that trypsin-isolated cytotrophoblast cells differentiated in culture to form syncytiotrophoblast cells.