Immunocytochemistry and electron microscopy were used to examine the ultrastructural features of immature neuroectodermal cells of the rat forebrain in their early stages of differentiation. We used a monoclonal antibody (AbR24) to GD3 ganglioside, which binds to cells of the subventricular zone (SVZ). R24 also labels immature cells in developing white and gray matter (LeVine and Goldman: J. Neurosci. in press, '88, and accompanying paper). Sections of developing cingulum and white matter adjacent to the cingulum were examined at E18, P4, and P10 by using a preembedding immunocytochemical technique with PAP reagents. Labeled cells seen earliest were large, with high nuclear to cytoplasmic ratios and few cytoplasmic organelles. With time, smaller forms appeared, with prominent Golgi apparatus and processes containing microtubules. Labeled cells with similar characteristics but which contained cytoplasmic vacuoles were also observed. The results indicate a series of ultrastructural transformations that are consistent with oligodendrocyte differentiation.