In cultures of embryonic and adult mouse striatum, we previously demonstrated that EGF induces the proliferation of putative stem cells, which give rise to spheres of undifferentiated cells that can generate neurons and astrocytes. We report here that the spheres of undifferentiated cells contain mRNA and protein for the FGF receptor (FGFR1). Indirect immunocytochemistry demonstrated that many of the cells within the EGF-generated spheres were immunoreactive for FGFR1. Exogenous application of bFGF to the EGF-generated cells induced the proliferation of two progenitor cell types. The first, a bipotent progenitor cell, gave rise to cells with the antigenic and morphological properties of neurons and astrocytes; the other gave rise to cells with neuronal characteristics only. bFGF-generated cells with neuronal morphology exhibited electrophysiological properties indicative of immature central neurons. These results support the hypothesis that sequential actions of growth factors play a role in regulating the generation of neurons and astrocytes in the developing CNS.