Spatially and temporally restricted populations of neurogenic astrocytes can generate multipotent neurospheres in vitro. To examine the ability of neurogenic astrocytes to respond to in vivo differentiation cues within a germinal matrix, we provided cultured neonatal cerebellar astrocytes access to the subependymal zone (SEZ) by grafting them directly into the lateral ventricle of adult mice. Here we report three events that follow such transplants. 1) Donor cells attach to periventricular structures, and form "neoplastic-like" spheres that penetrate the ventricular wall. These attached spheres can persist for months, as they give rise to "clones" of cells that infiltrate forebrain parenchyma. 2) Many donor cells enter the rostral migratory stream and migrate into the olfactory bulb where a small percentage differentiates as olfactory interneurons. 3) Finally, within the SEZ, some donor cells formed cell clusters that appear to interact with the SEZ neuronal precursor chains, and some donor cells differentiate into distinctive neurons with extensive, beady projections precisely confined between the ependymal layer and the striatum. Further analysis of normal SEZ anatomy reveals indigenous neurons with identical morphologies--some of which are contacted by 5-HT+ fibers--that we propose represent a heretofore uncharacterized, intrinsic SEZ neuron of unknown function. These results suggest that cultured astrocytes derived from non-SEZ brain regions can respond in different ways to in vivo cues provided by the adult lateral ventricle and SEZ by differentiating into neurons that eventually inhabit both the olfactory bulb and SEZ proper.