The effect of Schwann cell-conditioned medium (SCM) on the development in vitro of spinal cord neurons was studied. Spinal cord neurons from 18-day-old rat embryos were cultured in serum-free conditioned medium obtained from confluent rat Schwann cells. In cultures fed SCM, the cells developed typical neuronal morphology and were identified by indirect immunofluorescence using a monoclonal antibody to neurofilament protein. SCM stimulated neurite outgrowth and supported survival of spinal cord neurons. Preliminary characterization suggests that the neurotrophic factor in SCM appears to be a protein with a molecular weight greater than 8000 daltons.