Abstract We have studied cell lineage in the rat cerebral cortex using retroviral mediated gene transfer. By this method, a marker gene is inserted into dividing precursor cells such that their fate can be followed. We have applied this technique to two types of experiment. First, virus was used to label precursor cells of the cerebral cortex in situ during the period of neurogenesis. Second, cortical precursor cells were grown in dissociated cell culture, and virus was used to follow their development over the culture period. These experiments showed that the majority of precursor cells generate a single cell type - neurones, astrocytes, or oligodendrocytes. Moreover, this is true both in vivo and in dissociated cell culture. The only exception is a bipotential cell, which can generate both neurones and oligodendrocytes. These data suggest that the ventricular zone - the germinal layer of the embryonic cortex - is a mosaic of precursor cells of different restricted potentials. Although precursor cells are restricted in terms of the cell types they generate, they seem not to be restricted in either the cortical laminae or cytoarchitectonie areas to which they can contribute. Both neuronal and grey matter astrocyte precursors contribute cells to multiple layers of both infra- and supragranular laminae. Moreover, in the hippocampal formation, neuronal precursors can contribute cells to more than one hippocampal field.