The importance of intrinsic commitments and epigenetic influence to the development of mature neural cell phenotypes was assessed using embryonic day 10 murine neuroepithelial cells, isolated from telencephalon and mesencephalon. Two types of clones were generated with fibroblast growth factor: type-A clones consisted of large, amorphous cells, and type-B clones contained epithelial-like cells. In many type-B clones, very large numbers of precursor cells were produced. Twenty-four percent of type-B clones contained small numbers of neurons, and 59% of clones containing neurons also contained astrocytes, indicating that this clonal type was derived from a bipotential precursor cell. Neuronal differentiation was enhanced by culturing precursor cells with conditioned medium derived from an immortalized astroglial-like cell line. These results indicate that neuroepithelial precursors have discrete epigenetic requirements for their proliferation and differentiation.