The adult rat hippocampus contains fibroblast growth factor 2-responsive stem cells that are self-renewing and have the ability to generate both neurons and glia in vitro, but little is known about the molecular events that regulate stem cell differentiation. Hippocampus-derived stem cell clones were used to examine the effects of retinoic acid (RA) on neuronal differentiation. Exposure to RA caused an immediate up-regulation of NeuroD, increased p21 expression, and concurrent exit from cell cycle. These changes were accompanied by a threefold increase in the number of cells differentiating into immature neurons. An accompanying effect of RA was to sustain or up-regulate trkA, trkB, trkC, and p75NGFR expression. Without RA treatment, cells were minimally responsive to neurotrophins (NTs), whereas the sequential application of RA followed by brain-derived neurotrophic factor or NT-3 led to a significant increase in neurons displaying mature y-a-minobutyric acid, acetylcholinesterase, tyrosine hydroxylase, or calbindin phenotypes. Although NTs promoted maturation, they had little effect on the total number of neurons generated, suggesting that RA and neurotrophins acted at distinct stages in neurogenesis. RA first promoted the acquisition of a neuronal fate, and NTs subsequently enhanced maturation by way of RA-dependent expression of the Trk receptors. In combination, these sequential effects were sufficient to stimulate stem cell-derived progenitors to differentiate into neurons displaying a variety of transmitter phenotypes.