Supporting cells in the inner ear sensory epithelium are most likely hair cell progenitors. In an effort to establish an in vitro model system of hair cell differentiation, we developed immortalized epithelial cell lines by transferring the tsA58 allele of the SV40 large T antigen oncogene into neonatal rat utricular supporting cells using a retrovirus. The established cell lines have been stably maintained continuously for more than 25 passages and display many features similar to primary supporting cells. They grow in patches and assume a polygonal morphology. Immunocytochemical characterization of the established cell lines reveals that these cells can be labeled by epithelial cell markers, but not by fibroblast, glial or neuronal markers. The immortalized cells grow rapidly in serum medium at permissive temperature, but the majority cease proliferation when cultured in serum free medium at non-permissive temperature. These cells respond to mitogenic growth factors including bFGF, EGF and TGF-alpha and express growth factor receptors in a manner similar to the primary supporting cells. Furthermore, we find that the cells undergo a morphological differentiation when cultured in serum free medium at non-permissive temperature in the presence of bFGF. Under these conditions, the cells shrink in size, become elongated, and express early hair cell markers such as calretinin and calmodulin. The utricular epithelial cell line we have established may potentially provide an invaluable system for studying hair cell differentiation and regeneration.