P19 embryonal carcinoma cells are pluripotent and can be efficiently induced to differentiate in culture into neurons and astroglia by brief treatment with retinoic acid. Retinoic acid-treated P19 cells survive after grafting into the adult rat striatum and differentiate into neurons and glia within the transplantation site. No tumours develop from the grafted cells which continue to express foreign genes that had been transfected into the parental P19 cells. The neurons in these grafts express a variety of neurotransmitters similar to those formed in retinoic acid-treated P19 cell cultures and they mature to acquire the electrophysiological properties expected of fully developed neurons. These results suggest that P19 cells may be used for studies related to neuronal cell development and maturation and that P19 cells may be considered for cell replacement strategies in neurodegenerative disorders of the central nervous system.