Time lapse video recordings of cultured adult human and guinea pig spiral ganglion (hSG and gpSG) show that mitogen responsive progenitor/stem cells develop in the form of spheres that proliferate and differentiate into mature neurons and glia cells. Neurospheres, cultured with EGF and bFGF showed expression of nestin and incorporation of 5'-Bromo-2-deoxyuridine (BrdU). Newly formed BrdU labelled cells were positive for beta-tubulin, and also for GFAP demonstrating that neuronal cells were derived from a dividing population of progenitor cells. Dissociated spheres cultured either with glia cell line-derived neurotrophic factor (GDNF) or brain-derived neurotrophic factor (BDNF) and neurotrophin-3 (NT-3), induced differentiation of the progenitor cells. Video microscopy showed that neurons develop from subcultured spheres maintained for up to four weeks. Neurons showed fasciculation and migration with a speed of 10-30 microm/h, and some cells had up to 6 mm long neurites coexpressing TrkB and TrkC receptors. Precise dissection suggests that the neurons formed are cochlea-specific. The results suggest that the mammalian auditory nerve has the capability for self-renewal and replacement. Transplantation of progenitor cells together with established means to induce neural differentiation and fiber growth may facilitate strategies for better repair and treatment of auditory neuronal damage.