Oligodendrocyte progenitor cells were prepared by mechanical dissociation of 1-day-old rat brain cultures. These cells undergo proliferation and differentiation into oligodendrocytes as demonstrated by the expression of proliferation and differentiation-related specific antigens. We have used this unique culture system to characterize insulin-like growth factor I (IGF-I) receptors and their action in the central nervous system (CNS). 125I-IGF-I specifically binds to these cultures with high affinity. Competition-inhibition data suggest that IGF-I is most potent in competing for 125I-IGF-I binding, followed by IGF-II and insulin. Scatchard analyses of the binding data indicate a curvilinear plot with a Kd for high affinity of 0.2 nM, and a Bmax of 247 fmol/mg, and a Kd for low affinity of 3.2 nM and Bmax of 1213 fmol/mg protein. Covalent cross-linking followed by SDS-PAGE analysis demonstrated a radioactive band of Mr 135,000 which corresponds to the alpha subunit of the IGF-I receptor. Solution hybridization/RNase protection assay produced a single protected band corresponding to IGF-I receptor messenger RNA, further confirming the presence of these receptors. Incubation of progenitor cells with IGF-I resulted in a time- and concentration-dependent increase in [3H]thymidine incorporation and cell numbers. This effect appears to be mediated by IGF-I receptors since IGF-II and insulin were proportionately less potent. In addition to its effect on proliferation, IGF-I also increased the number of 4E7- and GC-antigen positive cells. These observations indicate that oligodendrocytes in primary culture express specific IGF-I receptors and that the interaction of IGF-I with these receptors results in the proliferation as well as differentiation of oligodendrocytes.