To study early events in the central nervous system (CNS) cholinergic development, cells from rat basal forebrain tissue were placed in culture at an age when neurogenesis in vivo is still active [embryonic day (E) 15]. The rapid mortality of these cells in defined medium, with 50% mortality after 5-10 h, was blocked completely by soluble proteins from the olfactory bulb (a basal forebrain target), extending earlier observations (Lambert, Megerian, Garden, and Klein, 1988). Treated cultures were capable of incorporating thymidine into DNA, and most cells incorporating 3H-thymidine (greater than 90%) also stained positive for neurofilament, confirming neuronal proliferation in the supplemented cultures. A small percentage of 3H-thymidine labelled cells were glial fibrillary acidic protein (GFAP) positive, but growth factors that support astroglial proliferation [epidermal growth factor (EGF), basic fibroblast growth factor (bFGF), and insulin-like growth factor (IGF-1)] were not sufficient for neuronal support. After 5 culture days with supplemented medium, almost 50% of the cells showed choline acetyltransferase (ChAT) immunofluorescence. The cholinergic neurons typically formed clusters separate from noncholinergic cells. These mature cultures did not develop if young cultures were treated with aphidicolin to block DNA synthesis. The data show that cultures of very young rat basal forebrain cells can be neurogenic, giving rise to abundant cholinergic neurons, and that early cell proliferation is essential for long-term culture survival.