While the majority of sympathetic neurons are noradrenergic, a minority population are cholinergic. At least one population of cholinergic sympathetic neurons arises during development by a target-dependent conversion from an initial noradrenergic phenotype. Evidence for retrograde specification has been obtained from transplantation studies in which sympathetic neurons that normally express a noradrenergic phenotype throughout life were induced to innervate sweat glands, a target normally innervated by cholinergic sympathetic neurons. This was accomplished by transplanting footpad skin containing sweat gland primordia from early postnatal donor rats to the hairy skin region of host rats. The sympathetic neurons innervating the novel target decreased their expression of noradrenergic traits and developed choline acetyltransferase (ChAT) activity. In addition, many sweat gland-associated fibers acquired acetylcholinesterase (AChE) staining and VIP immunoreactivity. These studies indicate that sympathetic neurons in vivo alter their neurotransmitter phenotype in response to novel environmental signals and that sweat glands play a critical role in the cholinergic and peptidergic differentiation of the sympathetic neurons that innervate them. The sweat gland-derived cholinergic differentiation factor is distinct from leukemia inhibitory factor and ciliary neurotrophic factor, two well-characterized cytokines that alter the neurotransmitter properties of cultured sympathetic neurons in a similar fashion. Recent studies indicate that anterograde signalling is also important for the establishment of functional synapses in this system. We have found that the production of cholinergic differentiation activity by sweat glands requires sympathetic innervation, and the acquisition and maintenance of secretory competence by sweat glands depends upon functional cholinergic innervation.