Bone Morphogenetic Proteins (BMPs) induce the differentiation of Serum-free Mouse Embryo (SFME) cells into astrocytes (D'Alessandro et al., 1994) as demonstrated by change in morphology, increase in Glial Fibrillary Acidic Protein (GFAP) content and classification as both type 1 and 2 astrocytes. Further analyses showed that in the presence of BMP, cells which had differentiated into astrocytes were inhibited from proliferation. Moreover, removal of BMP resulted in a resumption of proliferation accompanied by a loss of GFAP expression over time, indicating that under these in vitro conditions the differentiation was reversible. Since EGF is absolutely required for the survival of SFME cells, we examined the effect of its removal in the presence of BMP. Cell survival was > 80% in the presence of BMP-2, 7 or 2/7 and < 10% in the presence of TGF-beta 1. These data demonstrate that BMPs have effects on the proliferation, differentiation and survival of cells in the astrocyte lineage.