Stem cells isolated from the embryonic day 14 mouse striatum proliferate in response to epidermal growth factor (EGF). These stem cells produce clonally derived clusters of undifferentiated cells (spheres) which, in turn, produce neurons, astrocytes, and oligodendrocytes. Reverse transcription followed by polymerase chain reaction showed that EGF-generated spheres express several of the retinoid receptors. Thus, we asked whether all-trans retinoic acid (ATRA) could regulate the differentiation or proliferation of central nervous system stem cell-derived progeny. Under conditions that promote differentiation, cultures of dissociated spheres showed a dose-dependent increase in neuron numbers in response to ATRA. At the most effective neurogenic concentration (0.1 microM ATRA), neuron production increased two- to threefold. However, no difference in the total numbers of control and treated cells was observed. Delayed addition experiments suggest that responsive cells must be exposed to ATRA within the first 24 h in culture. Bromodeoxyuridine incorporation labeling indicates that the ATRA-generated neurons are derived from a mitotically active population of cells. Under conditions that promote glial progenitor cell division, however, ATRA attenuated proliferation (maximum of 60% decrease with 0.1 microM ATRA), accompanied by an increase in the number of glial fibrillary acidic protein-immunoreactive astrocytes. These results suggest that retinoids can regulate the proliferation of mitotically active EGF-responsive stem cell progeny to enhance neurogenesis and astrocyte differentiation.