Serum-free aggregating cell cultures of fetal rat telencephalon grown in the presence of 3 ng/ml (5 X 10(-10) M) epidermal growth factor (EGF) until day 12 showed 2- to 3-fold increased activities in the two glial enzymes, glutamine synthetase (GLU-S) and 2',3'-cyclic nucleotide 3'-phosphohydrolase (CNPase). This effect was concentration-dependent, with maximal stimulation in cultures treated daily with 3 ng/ml EGF. Addition of EGF during the first 10 culture days was sufficient to produce a maximal stimulation of both GLU-S and CNPase on day 19, whereas treatments starting on day 12 were ineffective. The stimulation of GLU-S preceded that of CNPase. The EGF-induced increase in GLU-S activity was not directly dependent on the presence of insulin, triiodothyronine, or hydrocortisone in the medium, whereas insulin was required for the stimulation of CNPase. A single dose of 5 ng/ml EGF on day 2 caused a slight but significant decrease in DNA synthesis after day 6. The present results indicate that in serum-free aggregating cell cultures of fetal rat telencephalon EGF partially inhibits DNA synthesis, and stimulates an early step in glial differentiation.