The effects of transforming growth factor alpha (TGF alpha) on low and high density cultures of fetal (embryonic day 17) rat medial septal cells were investigated and in some instances, compared to those of epidermal growth factor (EGF). In high density cultures, TGF alpha induces a significant increase in the number of astroglia and microglia. While the effects of TGF alpha on the astroglia are more pronounced when compared to EGF, those on the microglia are less notable. In addition, TGF alpha produces a time- and dose-dependent decrease in the activity of choline acetyltransferase (EC 2.3.1.6) and a proportional decrease in the number of acetylcholinesterase-positive neurons in these high density cultures. However, although both EGF and TGF alpha decreased choline acetyltransferase activity maximally at the same concentration (10 ng/ml), the latter was consistently more potent. TGF alpha does not affect cholinergic cell survival but the expression of their chemical phenotype and does so indirectly via the glial cells. On the other hand, TGF alpha directly induces a dose- and time-dependent increase in glutamic acid decarboxylase activity in these high density cultures without affecting the number of glutamic acid decarboxylase immunoreactive neurons. In low density cultures, TGF alpha acts as a general neuronal survival factor, affecting both cholinergic and GABAergic neurons. Here TGF alpha's neurotrophic activity is more evident than its effects on their chemical phenotype. These results suggest that TGF alpha exerts distinct and differential effects on the biochemical expression of two neuronal populations in the developing medial septum maintained in high density culture. Finally, as TGF alpha acts as a general neuronal survival factor in low density cultures, cell to cell interactions appear to be important in the ultimate response of these cells to this growth factor.