This study examined the morphology and the development of inward currents in the course of differentiation of a stem cell toward a neuronal phenotype. Using the P19 embryonal cell line, whole-cell current profiles of P19 cells before, during and after retinoic acid-induced differentiation were matched with their morphology as well as with the expression of neuron-specific enolase-like immunoreactivity. Prior to and during the initial 48 hr of retinoic acid treatment, P19 cells either lacked detectable currents or expressed a voltage-dependent outward potassium current, did not display neuron-like morphology and did not express neuron-specific enolase-like immunoreactivity. Upon completion of retinoic acid treatment, the current profile of fully differentiated P19 cells was hallmarked by a large voltage-dependent inward current which consisted of a sodium current and a smaller cobalt-sensitive calcium component, in addition to the potassium current observed earlier. Such cells invariably emitted neurites and displayed neuron-specific enolase-like immunoreactivity. Interestingly, coupling was prevalent among P19 cells in the undifferentiated state but was absent in the fully differentiated cultures. In studying cells undergoing neuronal differentiation, these results underscore the importance of taking into account both electrical properties and morphological considerations in determining the degree of differentiation.