In response to transection injury, the distal nerve segment produces a soluble neurite promoting factor (SN). In this study, the ability to support neuronal survival and differentiation have been studied. Embryonic rat dorsal root ganglion (DRG) neurons were plated out on collagen substrates and incubated in medium containing either SN or nerve growth factor (NGF). The number of surviving neurons was counted after 1, 2, 4, 7, and 15 days in vitro. After fixation and staining, the diameter of the surviving neurons was measured. During the period of observation, 60.8 +/- 5.8% of plated neurons survived in the presence of NGF and 90.5 +/- 12.9% survived with SN (P less than 0.05). The mean of median neuronal cell diameter was 28 +/- 2.7 microns with NGF and 34.2 +/- 3.7 microns with SN, (P less than 0.01). This increased diameter was due to enhanced survival of 30-50 microns diameter neurons. In parallel experiments, the degree of myelination of DRG neurons by Schwann cells was assessed morphometrically. In the presence of SN there was an 86% increased in myelination compared with NGF which indicates that not only is the survival of neurons increased but they are able to become fully differentiated in the presence of SN.