The PC12 rat pheochromocytoma cell line is used extensively as a model to study neuronal differentiation. These cells resemble adrenal chromaffin cells, differentiating both morphologically and biochemically when cultured in the presence of dexamethasone, but develop a sympathetic neuron-like phenotype when cultured in the presence of nerve growth factor. Expression of the protein product of the v-src oncogene in PC12 cells also induces neurite outgrowth similar to that resulting from nerve growth factor treatment (Alema et al: Nature 316:557-559, 1985). It is thus possible that c-src or a src-like tyrosine kinase participates in the signal transduction pathway by which nerve growth factor acts on PC12 cells. In this study a temperature-sensitive v-src gene has been introduced into PC12 cells. When cultures of these src-transformed cells are switched from the nonpermissive (40 degrees C) to the permissive (37 degrees C) temperature they elaborate neurites. The differentiation induced by src has been compared with that induced by nerve growth factor by determining whether src-transformed PC12 cells at 37 degrees C exhibit the same biochemical alterations as those induced in PC12 cells treated with nerve growth factor. Neurite extension at 37 degrees C in v-src-transformed cells, like NGF-induced differentiation, is accompanied by an increase in the nerve growth factor-inducible large external (NILE) protein. However, neurite extension in v-src-transformed cells is not blocked by the protein kinase inhibitor K-252a, which completely blocks NGF-induced neurite extension. Likewise, EGF receptor down-regulation and the development of saxitoxin and tetanus toxin binding sites are either much reduced or completely absent in src-differentiated compared with NGF-differentiated PC12 cells.