We have developed an in vitro system for studying molecular events regulating neurogenesis in the mouse olfactory epithelium (OE). Our observations suggest that two types of neuronal precursor may be involved: (1) a transiently existing, immediate neuronal precursor (INP), which generates two postmitotic daughter neurons; and (2) a neuroepithelial stem cell, which may be the basal cell (or some subclass of basal cell) of the OE, and is presumed to be the progenitor of the INP. Using antibody markers that distinguish basal cells and postmitotic receptor neurons in vitro and in vivo, we have shown that neurogenesis occurs early on in OE cultures, but then ceases because INPs divide only once to generate postmitotic neurons and no new INPs are produced by basal cells. To determine whether the basal cell-to-INP transition, or proliferation and neuronal differentiation of the INP, are regulated by crucial growth factors or cellular interactions, we are testing various polypeptide growth factors and extracellular matrix proteins for their effects on OE neurogenesis in vitro. We have also generated immortalized OE cell lines by using retroviruses to transduce oncogenes into cultured OE cells. One such cell line (derived from a primary OE basal cell culture) develops branching processes when transplanted into neonatal mouse brain--a condition in which cells from freshly isolated OE can undergo apparent morphological differentiation into neurons.