We have established permanent cell lines from the optic nerve of the rat with a temperature sensitive immortalizing oncogene (Simian Virus 40 large T-antigen carrying both the tsA58 and U19 mutations). The oncogene was transduced into primary cultures via a replication deficient retrovirus, and infected cells were selected with the antibiotic G418. A clonal cell line (tsU19-5) displayed some properties of oligodendrocyte precursors: it proliferated, bound the monoclonal antibody A2B5 (which recognizes minor ganglioside species), and expressed the intermediate filament vimentin and the enzyme 2',3'-cyclic-nucleotide 3'-phosphodiesterase (CNP) at 33 degrees C (the permissive temperature for the oncogene). At 39 degrees C (the non-permissive temperature), some cells had the potential to differentiate further, and expressed several oligodendrocyte specific components: galactocerebroside, myelin basic protein, proteolipid protein and CNP. These results suggest that conditional oncogenes can establish neural precursor cell lines which are still capable of differentiation in vitro.