Neurons and glia of the cerebral cortex are thought to arise from a common, multipotent progenitor cell that is instructed toward alternate fates by extracellular cues. How do these cells behave when confronted with conflicting cues? We show here that nestin-positive neuroepithelial (NE) cells from embryonic day 14 rat cortex coexpress surface receptor proteins for ciliary neurotrophic factor (CNTF) and platelet-derived growth factor (PDGF). Both sets of these receptor proteins are functional in NE cells, as shown by ligand-dependent activation of downstream signal-generating proteins. Transient (30') exposure to CNTF instructs NE cells toward an astrocyte fate. Brief exposure to PDGF initiates neuronal differentiation. However, when challenged with conflicting cues, PDGF is dominant to CNTF. Moreover, CNTF-treated NE cells can be "redirected" by a subsequent exposure to PDGF to form neurons instead of astrocytes, whereas the converse is not true. The asymmetric relationship between CNTF and PDGF indicates that these two growth factors act on a common progenitor cell that has, at a minimum, two fates available to it rather than separate populations of precommitted neuroblasts and astroblasts. This bipotent progenitor cell processes conflicting cues for neurons and glia in a hierarchical manner.