To test the hypothesis that transplanted neuronal or neuronal-like cell lines, grown in vitro, might survive and differentiate in the mammalian spinal grey matter, adult male Sprague-Dawley rats (N = 5) were injected with a suspension of between 3 x 10(5) and 1.0 x 10(6) DiI labeled, undifferentiated rat pheochromocytoma (PC12) cells in sterile phosphate buffered saline. The PC12 cell line was chosen since, in certain in vitro conditions, this cell line serves as a model of neuronal differentiation, which includes the ability to conduct action potentials and form functional synapses. After a survival time of 7 or 8 days, the spinal cords were removed, cryosectioned longitudinally and examined for detection of DiI labeled PC12 cells using fluorescent microscopy. The number of DiI labeled profiles and the proportions of the DiI cells which were differentiated were counted per section in at least five non-contiguous sections per animal. Differentiation was defined as cells with neurite-like extension which exceeded twice the soma diameter. Results demonstrated the following: (1) from 2 to 15% of the transplanted PC12 cells survived; (2) migration within the spinal grey matter occurred since PC12 cells were found as much as 510 microns away from the injection site; (3) of the surviving PC12 cell population, a proportion of between 60 and 80% were differentiated, many with two or more neurite-like processes, in all of the rats; (4) no mitotic profiles were observed in DiI labelled cells; (5) undifferentiated PC12 cells were juxtaposed to the lumens of small blood vessels or within the lesion cavity. Although the specific factors remain to be elucidated, the observed PC12 migration and differentiation within the host spinal grey matter appears to be controlled by factors in the microenvironment. These data support the use of a homogeneous in vitro population of neuronal or neuronal-like cells, which are readily accessible to transfection with the appropriate genes, as transplant sources for the injured spinal cord.