We have isolated and characterized a conditionally immortalized glial cell line that expresses mature myelin proteins, as well as functional GABA(A) receptors. Glial cells were isolated from postnatal day 1 H-2Kb-tsA58 transgenic mice that contain the temperature-sensitive SV40 large T antigen oncogene under the control of an interferon-gamma-inducible promoter. A clonal line was isolated that grew rapidly under permissive conditions (33 degrees C in the presence of interferon-gamma), but not under nonpermissive conditions (37 degrees C in the absence of interferon-gamma). Cells expressed mRNAs of mature myelin proteins (myelin basic proteins and proteolipid protein) when grown under either permissive or nonpermissive conditions, but myelin basic proteins were detected only when cells were maintained at 37 degrees C. GABA induced an increase in intracellular calcium concentration, indicating the presence of functional receptors for this transmitter. Characterization of the GABA-evoked calcium response and whole-cell currents indicated that these responses were mediated by GABA(A) receptors. Reverse transcription-polymerase chain reaction revealed differential expression of mRNAs for specific GABA(A) receptor subunits. Messages for the alpha2, alpha4, beta1, and delta subunits were readily detected by reverse transcription-polymerase chain reaction, whereas messages for the alpha1, alpha3, alpha5, alpha6, beta2, beta3, and gamma1-3 subunits were not. As this cell line can be easily propagated and differentiated, it should provide a valuable tool in studying not only the development of oligodendroglia, but also the function of their transmitter receptors and myelin proteins.