Neurogenesis continues throughout adulthood in the mammalian olfactory epithelium (OE), and both neurons as well as nonneuronal cells are reconstituted following experimental injury. Underlying the capacity of the OE to replenish its mature elements is a population of progenitor basal cells. Although the precise lineage relationships among progenitor and mature cell types are incompletely understood, the population of globose basal cells (GBCs) contains immediate precursors to neurons as well as amplifying progenitors, and retroviral lineage analyses suggest that multipotential GBCs are activated following direct injury to the OE. To assess the controls on the process of epithelial regeneration, we have characterized a cell line derived from rat OE and studied the effects of serum and tissue extracts, fibroblast growth factor-2 (FGF2) and transforming growth factor-alpha (TGF alpha) on the cells. Using a panel of cell type-specific markers whose patterns of labeling in the OE are well defined, including recently developed markers for GBCs, we characterized the phenotype of the cell line under differing culture conditions. In complete medium, which contains serum and tissue extracts, the cell line displayed characteristics of GBCs that are prominent during regeneration. Serum and extract withdrawal induced the cells to differentiate into neurons. In contrast, FGF2 prevented neuronal differentiation and maintained a GBC phenotype. TGF alpha had a mitogenic or differentiative effect that was context dependent. Finally, we demonstrate here that FGF2 is contained in mature olfactory neurons and sustentacular cells in vivo, suggesting a physiologic role for this growth factor in OE cell regulation.