Panax ginseng is a traditional Chinese herb with a wide range of therapeutic benefits. Recent studies focusing on its effect on the central nervous system have revealed that ginseng has neurotrophic effects including differentiation of neurons. However, most studies involve use of the water-soluble fraction called saponin, and little is known about the effect of the lipophilic fraction. In the present study, we have shown that the lipophilic fraction of ginseng at a concentration of between 0.1 and 50 microg/ml can induce neurite outgrowth of PC12 cells in a dose-dependent manner. Nearly all cells showed morphological differentiation in response to the lipophilic fraction. This morphological differentiation of PC12 cells appeared to be similar to that of NGF. The lipophilic fraction of ginseng also induced neurite extension and promoted survival of rat cortical neurons at a concentration of between 0.025 and 1 microg/ml. These neurotrophic effects on PC12 cells and cortical neurons were not inhibited by K252b, which selectively blocks neurotrophin actions by inhibiting trk-type receptor tyrosine phosphorylation. This suggests that trks do not participate in the neurotrophic action of the lipophilic fraction. However, the effects were completely attenuated by sphingosine, polymyxin B or staurosporin, known inhibitors of protein kinase C (PKC) and calmodulin-dependent kinases. Our results suggest that the lipophilic fraction of ginseng exerts its neurotrophic effects via PKC-dependent pathways.