We have found that CNTF and LIF are pleiotropic modulators of development in the O-2A lineage. Both molecules enhanced the generation of oligodendrocytes in cultures of dividing O-2A progenitors. CNTF and LIF also promoted oligodendrocyte maturation, as determined by expression of myelin basic protein, and could promote oligodendrocyte survival to an extent comparable with insulin-like growth factor-1 or insulin. In addition, LIF and CNTF both promoted the differentiation of O-2A progenitors into type-2 astrocytes but only when applied in the presence of extracellular matrix (EnMx) derived from cultures of endothelial cells. The ability of CNTF and LIF to enhance differentiation of O-2A progenitors along either of the alternative pathways of oligodendrocyte and astrocyte differentiation suggests that these proteins are able to enhance the process of differentiation per se, while the actual path of differentiation promoted is determined by the presence or absence of additional molecules in the extracellular environment.