The c-erbA proto-oncogenes encode nuclear receptors for thyroid hormone (T3), a hormone intimately involved in mammalian brain maturation. To study thyroid hormone receptor (TR) action on neuronal cells in vitro, we expressed the chicken c-erbA/TR alpha-1 as well as its oncogenic variant v-erbA in the adrenal medulla progenitor cell line PC12. In the absence of T3, exogenous TR alpha-1 inhibits NGF-induced neuronal differentiation and represses neuron-specific gene expression. In contrast, TR alpha-1 allows normal differentiation and neuronal gene expression to occur in the presence of T3. Finally, TR alpha-1-expressing cells become NGF-responsive for proliferation when T3 is absent, but NGF-dependent for survival in presence of T3. A similar differentiation induction by NGF plus T3 was observed in a central nervous system-derived neuronal cell line (E 18) expressing exogenous TR alpha-1. Together with the finding that TR alpha-1 constitutively blocked dexamethasone-induced differentiation of PC12 cells into the chromaffin pathway, these results suggest that TR alpha-1 plays an important role in regulating commitment and maturation of neuronal progenitors. In contrast, the v-erbA oncogene, a mutated, oncogenic version of TR alpha-1, partially but constitutively inhibited NGF-induced neuronal differentiation of PC12 cells and potentiated dexamethasone-induced chromaffin differentiation, giving rise to an aberrant "interlineage" cell phenotype.