Primitive neuroectodermal tumors are thought to result from disturbed differentiation of neuroepithelial stem cells. These tumor cells retain the capacity to differentiate toward the neuron or glia phenotype under extrinsic stimuli. Previously, we have developed a model for the differentiation of a medulloblastoma cell line (Dev cells) induced by infection with the human retrovirus HTLV-I. This virus delivers signals which trigger the Dev cells to differentiate toward an astrocytic lineage. The aim of this study was to characterize the time course of viral infection, to identify the soluble factors released and to analyze their effects on Dev cells. The early phase of viral replication is followed by latent infection. Viral infection induces glial differentiation in a subpopulation of cells and results in the death of others. The inflammatory cytokines TNF alpha, IL1 alpha and IL6 were detected in medium conditioned by infected Dev cells. TNF alpha was cytotoxic and cytostatic for subpopulations of Dev cells. Furthermore, TNF alpha treatment reproduced the modulation of expression of the major histocompatibility complex antigens (MHC class I) observed in infected Dev cells. These observations support the view that HTLV-I infection, which triggers glial differentiation of medulloblastoma Dev cells, also causes the release of soluble factors capable of downregulating proliferation of dividing tumor cells and of modifying their recognition by cellular immune effectors.