To identify molecules that regulate the transition of dividing neuroblasts to terminally differentiated neurons in the CNS, conditions have been developed that allow the neuronal differentiation of cortical precursor cells to be examined in vitro. In these cultures, the proliferation of undifferentiated precursor cells is controlled by basic fibroblast growth factor (bFGF). The proliferative effects of bFGF do not preclude the action of signals that promote differentiation, since addition of neurotrophin-3 (NT-3) antagonizes the proliferative effects of bFGF and enhances neuronal differentiation. In addition, blocking NT-3 function with neutralizing antibodies leads to a marked decrease in the number of differentiated neurons, without affecting the proliferation of cortical precursors or the survival of postmitotic cortical neurons. These observations suggest that bFGF and NT-3, by their distinct effects on cell proliferation and differentiation, are key regulators of neurogenesis in the CNS.