We examined the effect of testosterone (T) and 17 beta-estradiol (E) on differentiation and proliferation of cultured neurons from the cortex of 14-day-rat embryos (E14) using immunocytochemistry. We found that the cultures receiving E had significantly more neurons with longer neurites than the control cultures, while both fewer and less differentiated neurons were seen after 24 h of incubation with T. However, neither T nor E changed the number of cells positive for BrdU, a proliferation marker. We also found that the androgen receptor (AR) was markedly expressed in the neurons, whereas the expression of estrogen (ER(alpha)) receptor was barely detectable. These results suggest that E and T differ in effect on differentiation, while neither affect proliferation in early developmental cortex. Furthermore, since the AR is expressed in the cortical neurons by E14, the inhibitory effect of T on differentiation may be receptor-mediated, while the stimulatory effects of estrogen in the cortex do not appear to involve nuclear ER(alpha) at this developmental stage.