We have established a multipotent clonal cell line, named MEB5, from embryonic mouse forebrains after the infection of a retrovirus carrying E7 oncogene of human papillomavirus type 16. MEB5 cells proliferated in serum-free, epidermal growth factor (EGF)-supplemented medium. They expressed markers for neural precursor cells (nestin, A2B5, and RC1) and did not express markers for neurons (class III beta-tubulin), astrocytes (glial fibrillary acidic protein), and oligodendrocytes (galactocerebroside). MEB5 cells were stably maintained in an undifferentiated state with a diploid karyotype in the presence of EGF. When they were deprived of EGF, about 50% of the cells died due to apoptosis within 24 h. The remaining cells differentiated into neurons, astrocytes, or oligodendrocytes within 2 wk. The newly developed cells with neuronal morphology were immunoreactive for gamma-aminobutyric acid and exhibited neuronal electrophysiological properties. When MEB5 cells were treated with leukemia inhibitory factor for 7 d, they were induced to differentiate exclusively into astrocytes. These results indicate that MEB5 is a cell line with characteristics of EGF-dependent, multipotent neural precursor cells. This cell line should provide a good model system to study the mechanisms of survival, proliferation, and differentiation of the multipotent precursor cells in the central nervous system.