Introduction of nerve growth factor (NGF) receptors into a medulloblastoma cell line results in expression of high- and low-affinity NGF receptors but not NGF-mediated differentiation. Expression of the cloned human nerve growth factor receptor (NGFR) cDNA in cell lines can generate both high- and low-affinity binding sites. Since the inability to respond appropriately to differentiation factors such as NGF may contribute to determining the malignant phenotype of neuroblastomas, we sought to determine whether the same is true of medulloblastomas. To generate a human central nervous system neuronal cell line that would respond to NGF, we infected the medulloblastoma cell line D283 MED with a defective retrovirus carrying the cDNA coding for the human NGFR. The resultant cells (MED-NGFR) expressed abundant low- and high-affinity NGFRs, and NGF treatment induced a rapid transient increase of c-fos mRNA in the NGFR-expressing cells but not in the parent line or in cells infected with virus lacking the cDNA insert. However, the MED-NGFR cells did not internalize the NGFR at high efficiency, nor did they differentiate in response to NGF. Three important conclusions emerge from this study: (i) internalization of NGFRs is not necessary for some early rapid transcriptional effects of NGF; (ii) an unknown factor(s) that cooperates with the cloned NGFR in allowing high-affinity NGF binding is found in a primitive central nervous system cell line; and (iii) NGFRs introduced into and expressed by D283 MED (i.e., MED-NGFR) cells are partially functional but are unable to induce differentiation in these primitive neuron-like tumor cells, implying that high-efficiency receptor-mediated endocytosis of NGF and its receptor may be a necessary step in the cascade of events leading to NGF-mediated differentiation. 