An antibiotic, azatyrosine [L-beta-(5-hydroxy-2-pyridyl) alanine], specifically converts ras-, raf- or c-erbB2 (neu)-transformed NIH3T3 cells to apparently normal phenotype. The reversion induced by azatyrosine is permanent, and the phenotype of the revertant cells does not change even after prolonged culture in the absence of azatyrosine [N. Shindo-Okada, O. Manabe, H. Nagahara & S. Nishimura (1989). Mol. Carcinogen., 2, 159-167]. In the present study, we found that neurite outgrowth of PC12 cells induced by expression of either the ras or raf oncogenes was inhibited by addition of azatyrosine to the medium. Azatyrosine also inhibited neurite outgrowth induced by microinjection of oncogenic Ras protein into PC12 cells. The dose dependency was much the same for the two systems, inhibition of neurite outgrowth of PC12 cells and reversion of the transformed NIH3T3 cells. Microinjection of azatyrosine into the cells was as effective as addition to the medium, indicating that the target of azatyrosine is intracellular. In contrast, neurite outgrowth induced by nerve growth factor, which has been shown to be mediated by normal Ras [N. Hagag, S. Halegouna & M. Viola (1986). Nature, 319, 680-682], was found to be resistant to azatyrosine. Azatyrosine also showed no effect on neurite outgrowth induced by a membrane-permeant cyclic AMP analog through another pathway. These findings suggest that azatyrosine sensitivity is the result of abnormal signal transduction by oncogenic Ras. It was shown that azatyrosine also inhibited differentiation-associated growth arrest of PC12 cells induced by oncogenic Ras. In Ras-induced neurite outgrowth, the azatyrosine-sensitive process was found to be completed in the first 6-9 h, and is probably essential for the commitment of PC12 cells to differentiation rather than to growth.