When CNS precursor cells purified from the external germinal layer of the early postnatal mouse cerebellum are cultured in cellular reaggregates, DNA synthesis increased 10-fold above that of cells dispersed in a monolayer or embedded in a collagen matrix. Dividing precursor cells gave rise to neurons immunopositive for the neural antigens N-CAM, L1, and TAG-1, but not to astroglial cells immunopositive for glial filament protein. Moreover, proliferating precursor cells did not generate other types of cerebellar neurons, as judged by the lack of expression of glutamic acid decarboxylase, the synthetic enzyme for gamma-amino-n-butyric acid. By contrast, the addition of astroglial cells, or astroglial cell membranes, to cellular reaggregates of granule cell neuroblasts arrested precursor cell DNA synthesis in a dose-dependent manner. These results suggest that homotypic contact interactions among CNS neural progenitors control precursor cell proliferation and fate in generative zones of developing brain.