Developmental studies have shown that both neurons and glia arise from the subventricular zone (SVZ) but there have been no clonal analyses to determine whether a single progenitor can produce both. Therefore, we used replication deficient retroviral vectors to analyze the clonal progeny of single rat SVZ cells that were maintained in culture media permissive or non-permissive for neuronal differentiation. When maintained in medium supplemented with 5% fetal bovine serum, all surviving progenitors generated glial cell clones. Within these glial clones we often observed both type 1 astrocytes and O-2A lineage cells. When SVZ cells were maintained in medium permissive for neurogenesis approximately 50% of the total clones contained at least one antigenically defined neuron. Of those clones that contained neurons, 60% contained neurons and glia. The other 50% of the total clones were either comprised of only astrocytes, astrocytes and oligodendrocytes, or were unidentifiable. Since the culture environment permitted multilineage clone formation, yet many homogeneous neuronal or astrocytic clones were obtained, some progenitors must become developmentally restricted while they are in the germinal zone. Therefore, we conclude that the perinatal SVZ is a mosaic of multipotential, bipotential, and lineage restricted precursors, and that the lack of postnatal neocortical neurogenesis is not due to the absence of potential neuroblasts.