The TRK-T1 oncogene, isolated from a human thyroid carcinoma, represents a rearranged form of the high affinity nerve growth factor (NGF) receptor encoded by the NTRK1 gene; it is created by an intrachromosomal rearrangement fusing the NTRK1 tyrosine kinase domain to the 5' portion of the TPR gene. We have investigated the effect of the TRK-T1 oncogene in PC12 cells, a model system for studying neuronal differentiation and the mechanism of action of NGF. Here, we report that, in PC12 cells, the TRK-T1 oncogene has a differentiating effect that resembles that of NGF and requires the phosphorylation of the oncoprotein. Our results are consistent with the hypothesis that TRK-T1, as well as the original TRK oncogene, induces PC12 differentiation by mimicking the action of NGF bound to its receptor.