When embryonic dopaminergic neurons are transplanted into the adult brain, approximately 95% die within a few days. To assess whether microglia activated during transplantation might be responsible for this rapid death, we examined the effect of microglia on rat embryonic dopaminergic neurons in vitro. Conditioned medium from 7-day-old microglia was found to decrease the number of dopamine neurons surviving in primary culture, but activation of the microglia with N-formyl-methionyl-leucyl-phenylalanine (FMLP) or Zymosan A did not increase the toxicity of the conditioned medium. We next tested the effect of coculturing microglia and dopaminergic neurons by placing microglia in semipermeable well inserts over the neuronal cultures. The presence of microglia now increased dopaminergic neuronal survival, microglial activation again having no effect. To increase yet further the possible interactions between microglia and neurons, the mesencephalic cells and microglia were mixed together and placed as a tissue in three-dimensional culture, and here again the presence of microglia increased dopaminergic neuronal survival with no effect of activation. Contact of microglia with the mesencephalic cells therefore converted them from being toxic to dopaminergic neurons to promoting their survival. The change in microglial effect from toxic to protective was caused by soluble molecules secreted by cells in the neuronal cultures, as conditioned medium derived from microglia-neuronal cocultures also had a dopaminergic neuron survival effect, indicating that microglia in cocultures behave differently from microglia removed from neuronal and glial influence. Microglia cocultured with either neurons or astrocytes downregulated inducible nitric oxide synthase (iNOS), indicating a decrease in the production of nitric oxide and possibly other toxic molecules. These findings indicate that in their natural environment, microglia are likely to be beneficial for the survival of embryonic dopaminergic grafts.