Although previous studies have revealed that the prenatal rat ventricular zone contains separate progenitor cells for neurons, astrocytes, and oligodendrocytes during the development of the cerebral cortex as early as the beginning of neurogenesis (Luskin et al., 1993; Grove et al., 1993), it is still unclear whether there are bipotential progenitor cells in the neonatal telencephalic subventricular zone which give rise to both astrocytes and oligodendrocytes during the peak of gliogenesis. To investigate this possibility, discrete groups of clonally related cells, generated by infecting progenitor cells of the neonatal subventricular zone with a retroviral lineage tracer, were analyzed ultrastructurally. An intracerebral injection of retrovirus encoding the reporter gene E. coli beta-galactosidase (lacZ) was made into the subventricular zone of newborn rats. Two weeks later their brains were perfused, sectioned, and histochemically reacted with X-Gal to identify at the light microscopic level clones of lacZ-positive cells. The sections were processed for electron microscopy to enable the identity of clonally related cells to be assessed at the ultrastructural level. All of the clones analyzed contained cells of the same phenotype and could be divided into four distinct types: immature cell clones situated in the subependymal zone surrounding the lateral ventricle, oligodendrocytes clones, and white or gray matter astrocyte clones. Not all of the cells in every clone displayed ultrastructural features of a mature cell. Rather, in some glial clones the lacZ-positive cells appeared to be at different stages of differentiation. However, we never encountered clones which contained both macroglial subtypes or clones containing neurons. Although the existence of bipotential progenitor cells cannot be completely dismissed, our results indicate the absence of progenitor cells in vivo in the neonatal subventricular zone which divide and generate astrocytes and oligodendrocytes.