To test extracellular signals that direct the development of the olfactory system, we have generated clonal temperature-sensitive cell lines that represent distinct cellular lineages derived from the E10 mouse olfactory placode. Two of these lines, OP6 and OP27, express (at the permissive temperature), a transcriptional profile representing intermediate-late developmental stages in the olfactory receptor neuron (ORN) lineage. At the nonpermissive temperature, both OP6 and OP27 cells can be induced by all-trans retinoic acid to differentiate into a population of mature bipolar ORN-like cells. In response to retinoic acid, differentiated OP6 and OP27 down-regulate neuron-specific transcription factors required for early stages of neuronal differentiation, and shift active components of the neurotrophin signaling cascade (Trk receptors) into a kinase inactive state. When morphologically mature, OP6 and OP27 express the mature ORN chemosensory signaling components, olfactory G-protein (G(olf)), Type III adenylate cyclase (ACIII), OCNC1, and the olfactory marker protein (OMP). OP27 expresses one odorant receptor, OR 27-3. OP6 expresses two very closely related receptors, OR 6-13 and OR 6-8. Voltage-gated sodium and potassium channels resembling those recorded from primary cultures of ORNs can also be recorded from a subset of differentiated OP6 cells.