We have previously shown that the P19 line of embryonal carcinoma cells develops into neurons, astroglia, and fibroblasts after aggregation and exposure to retinoic acid. The neurons were initially identified by their morphology and by the presence of neurofilaments within their cytoplasm. We have more fully documented the neuronal nature of these cells by showing that their cell surfaces display tetanus toxin receptors, a neuronal cell marker, and that choline acetyl-transferase and acetyl cholinesterase activities appear coordinately in neuron-containing cultures. Several days before the appearance of neurons, there is a marked decrease in the amount of an embryonal carcinoma surface antigen, and at the same time there is a substantial decrease in the volumes of individual cells. Various retinoids were able to induce the development of neurons in cultures of aggregated P19 cells, but it did not appear that polyamine metabolism was involved in the effect. We have isolated a mutant clone which does not differentiate in the presence of any of the drugs which are normally effective in inducing differentiation of P19 cells. This mutant and others may help to elucidate the chain of events triggered by retinoic acid and other differentiation-inducing drugs.