The cellular pathway of ciliated cell differentiation and its regulation is poorly defined. To begin to understand the process of ciliated cell differentiation, we sought to identify factors regulating ciliated cell development in vitro. Rat tracheal epithelial (RTE) cells were cultured on collagen gel-coated membranes at an air-liquid interface in hormone- and growth factor-supplemented medium (complete medium [CM]). Under these conditions, RTE cells first proliferate and then differentiate into a pseudostratified mucociliary epithelium. Ciliated cell differentiation was measured using a monoclonal antibody, RTE3, which was shown to specifically react with the plasma membrane of ciliated cells. Cultures were immunostained in situ, and the percentage of the culture surface covered with ciliated cells was estimated using videomicroscopy and an image analysis program. If an air-liquid interface was not created and the cells were maintained in the submerged state, ciliated cell differentiation was suppressed 25-fold. Culture in the absence of mitogenic components present in CM, including epidermal growth factor (EGF), cholera toxin (CT), or bovine pituitary extract, resulted in 2- to 4-fold increases in the percentage of ciliated cells. When both EGF and CT were removed from the media, DNA synthesis and total cell number was reduced, while ciliated cell differentiation increased as much as 5-fold. These results demonstrate that submersion inhibits, while withdrawal of mitogenic compounds promotes, ciliated cell differentiation in vitro.