VGF is an NGF-inducible protein whose expression closely correlates with PC12 cell neurite outgrowth. Immunolocalization of VGF in PC12 cells by electron microscopy revealed labeling of a subpopulation of large dense core vesicles. To determine whether VGF expression may be involved in neural and axonal differentiation, we examined VGF immunoreactivity in developing cultured hippocampal neurons. Most VGF appeared to be in vesicles which were present in neurons from the earliest developmental stages and were particularly abundant in a small number of neurons, most of which were GABAergic. VGF became restricted to axons after dendrites had begun to mature, a stage more closely associated with synaptogenesis than axonal polarization. Colocalization studies suggest that VGF-containing and synaptophysin-containing vesicles are distinct and differentially distributed.