Staurosporine (STS), a broad spectrum protein kinase inhibitor, was previously shown to induce neurite outgrowth in several neuroblastoma cell lines. However, data on the neurotrophic potential of this alkaloid in embryonic stem cell systems were not available. Therefore, three mouse ES cell lines, IB10, RW4, and Bruce 4, were induced to enter neurogenesis in culture at low concentrations of STS. These cells differentiated into epidermal growth factor-responsive neural precursor cells, formed neurospheres, and further developed to neurons and astrocytes. The clonally derived neurospheres consisted of multipotent cells which exhibited some of the classical characteristics of early CNS stem cells and could be propagated in vitro. STS was antagonistic in several ways to retinoic acid (RA), a vitamin A metabolite, which promotes neuritogenesis. Results from RT-PCR experiments and inhibition studies with RA provided evidence that staurosporine exerted its neurotrophic effects through the induction of very late levels of the nerve growth factor and protein kinase C neurogenesis pathways.