We have shown recently that the presence of albumin in astrocytes triggers the synthesis and release of oleic acid, which behaves as a neurotrophic factor for neurons. Thus, oleic acid promotes axonal growth together with the expression of the axonal growth-associated protein, GAP-43. Here we attempted to elucidate whether the neurotrophic effect of oleic acid includes dendritic differentiation. Our results indicate that oleic acid induces the expression of microtubule associated protein-2 (MAP-2), a marker of dendritic differentiation. In addition, the presence of oleic acid promotes the translocation of MAP-2 from the soma to the dendrites. The time course of MAP-2 expression during brain development coincides with that of stearoyl-CoA desaturase, the limiting enzyme of oleic acid synthesis, indicating that both phenomena coincide during development. The effect of oleic acid on MAP-2 expression is most probably independent of autocrine factors synthesized by neurons because this effect was also observed at low cellular densities. As oleic acid is an activator of protein kinase C, the possible participation of this transduction pathway was studied. Our results indicate that added oleic acid or oleic acid endogenously synthesized by astrocytes exerts its neurotrophic effect through a protein kinase C-dependent mechanism as the effect was inhibited by sphingosine or two myristoylated peptide inhibitors of protein kinase C. The transduction pathway by which oleic acid induces the expression of genes responsible for neuronal differentiation appears to be mediated by the transcription factor NeuroD2, a regulator of terminal neuronal differentiation.