To facilitate the study of the molecular events underlying the development of optic-nerve-derived oligodendrocytes and their growth-factor-related signal transduction events, we immortalized perinatal rat optic nerve cells with a temperature-sensitive simian virus 40 large T-antigen, carrying the tsA58 and U19 mutations, via a retrovirus vector. The line, tsU19-9, was selected on the basis of the expression of the neural precursor marker nestin. At the permissive temperature, 33 degreesC, tsU19-9 cells had a flat epithelial morphology. In contrast, following exposure to platelet-derived growth factor (PDGF), a factor important in the lineage progression of oligodendrocytes, or in the presence of dibutyryl cyclic AMP at 39 degreesC (the non-permissive temperature), the cells underwent morphological and antigenic differentiation to cells characteristic of the oligodendrocyte lineage. We used this cell line to investigate the binding characteristics of PDGF and related signalling cascades. Competition binding, phosphoinositide hydrolysis and intracellular Ca2+ mobilization assays all demonstrated that the three different isoforms of PDGF (AA, AB and BB) bound to and acted on the cell line. Overnight exposure to forskolin, a treatment that initiated morphological and phenotypic progression into an oligodendrocyte lineage, decreased PDGF-BB-induced intracellular Ca2+ mobilization and inhibited basal and PDGF-stimulated [3H]thymidine incorporation. Our results demonstrate that tsU19-9 may serve as a resource to study early optic-nerve oligodendrocyte development.