An immortalized neural cell line V1 was prelabeled with DiI (1,1 -dioctadecyl-3,3,3 ,3 -tetramethylindocarbocyanine) and transplanted stereotaxically into the cerebellum and hippocampus of developing and adult mice. The mode of migration, differentiation and arrangement of the grafted cells were examined by confocal laser scanning microscopy and immunohistochemical staining. This cell line was established by retrovirus-mediated transfer of the temperature-sensitive allele tsA58 of SV40 large T antigen oncogene into embryonic mouse hypothalamic cells. Cultured V1 cells divide rapidly at 33°C and their mitosis is suppressed at 39°C. This cell line differentiated into both neuron and glia, and by switching from 33 to 39°C, their neuronal and glial differentiation was facilitated. Grafted cells did not show any tumorigenicity for a long period of time. Some of the cells grafted into the neonatal cerebellum and hippocampus were arranged along the host cortical layer and showed neuronal or glial differentiation according to the grafted site. The cells grafted into adult cerebellum also showed migration and arrangement along the host cortical layer as well as morphological differentiation into glial cells in a manner similar to that of transplantation to the neonate. On the other hand, the cells grafted into the adult hippocampus made only clusters without forming any organized arrangement. These findings suggest that the grafted cells are integrated into the developmental processes of the host brain, and the mode of differentiation and arrangement of the grafted cells depends on the microenvironment of the different developmental stages of the host brain. The involvement of host blood vessels and astroglial framework in the migration and arrangement of the grafted cells was also suggested. Furthermore, these findings suggest the plasticity of the host brain in response to the grafted cells and the possibility to reconstruct the host brain with this multipotential neural cell line.