Primitive neuroectodermal tumors (PNET) represent a family of undifferentiated neural neoplasms which predominantly occur in children. PNETs are likely to originate from precursor cells and exhibit a marked potential for neuronal, glial and ependymal differentiation. A prominent example is the medulloblastoma of the cerebellum. In a model system using a novel transgenic CNS transplantation model, we have introduced a combination of ras and myc oncogenes into cell suspensions from fetal forebrain (E14) and postnatal cerebellum (P2) of the rat. Oncogene transfer into fetal forebrain grafts resulted in a high incidence of anaplastic neural tumors predominantly derived from glial precursors. Cell lines established from these neoplasms expressed high levels of both oncogenes. In a second experiment, the ras/myc vector was introduced into cell suspensions from neonatal cerebellum. The transformed cells were cultured for 3 weeks. Following stereotaxic transplantation, tumors of a similar morphology were observed. However, one animal developed a neoplasm with features of a cerebellar medulloblastoma. A cell line which exhibits a marked capacity for neurite extension and synaptogenesis was established from this tumor. Since these cells neither express ras nor myc, an insertion mutagenesis event appears to be responsible. Experiments to characterize this mutation are in progress. Our results indicate a potent transforming effect of ras and myc on neural precursor cells in vivo.