PC12h-R cell, a subclone of PC12 cells, exhibited a neuron-like phenotype, including neurite outgrowth and increased acetylcholinesterase activity, in response to epidermal growth factor (EGF) as well as nerve growth factor (NGF). We examined the mechanism by which EGF induced the neuronal differentiation in PC12h-R cells. The EGF-induced neuronal differentiation of PC12h-R cells was not blocked by K252a, whereas that induced by NGF was. EGF induced sustained tyrosine phosphorylation of the EGF receptor in PC12h-R cells, but not in the parent PC12h cells, which do not show neuronal differentiation in response to EGF. In addition, the rate of EGF-induced down-regulation of the EGF receptor in PC12h-R cells was decreased compared with that in PC12h cells. Furthermore, we found that the duration of EGF-induced tyrosine phosphorylation of the EGF receptor in PC12h-R cells was similar to that of NGF-induced tyrosine phosphorylation of p140trkA in PC12h cells. The EGF-induced phosphorylation of the EGF receptor in PC12h cells was less sustained than that of p140trkA by NGF in PC12h cells. These findings suggested that the EGF-induced neuronal differentiation of PC12h-R cells is due to the sustained activation of the EGF receptor, resulting from the decreased down-regulation of the EGF receptor and that the duration of the receptor tyrosine kinase activity determines the cellular responses of PC12 cells. We concluded that sustained activation of the receptor tyrosine kinase induces neuronal differentiation, although transient activation promotes proliferation of PC12 cells.