Nerve growth factor (NGF) is required for the development and survival of sympathetic and neural crest-derived sensory neurons. The mechanism of action of NGF has been extensively studied in the NGF-responsive rat pheochromocytoma cell line, PC12. When treated with NGF, PC12 cells initiate neurite outgrowth and differentiate into cells with a neuronal phenotype. This process is prevented by RNA synthesis inhibitors. NGFI-B is a gene, identified by differential hybridization, that is rapidly, but transiently induced in PC12 cells by NGF. The nucleotide sequence of the NGFI-B gene was determined, and it encodes a 61 kd protein with strong homologies to members of the glucocorticoid receptor gene family. The two regions of homology between NGFI-B and this family of ligand-dependent transcriptional activators are the region corresponding to the DNA-binding domain and the region comprising the ligand-binding domain near the COOH-terminus. NGFI-B, as a possible ligand-dependent transcriptional activator induced by NGF, may play a role in initiating NGF-induced differentiation.