Ameboid microglia are isolated from the cerebral tissue of neonatal rat by selective cell adhesion to plastic. Histochemical markers show that the microglial preparations are homogeneous (95 +/- 3%) and represent a 10% yield from starting cultures. Isolated ameboid microglia contain nonspecific esterase activity, the macrophage surface antigens MAC-1 and MAC-3, and acetylated low-density lipoprotein receptors. Ameboid cells have functional properties similar to those of macrophages, including the ability to engulf 5 micron latex beads, to secrete Interleukin-1 (IL-1) and to release superoxide anion. Unlike monocytes and adherent spleen cells, ameboid microglia do not show peroxidase activity by histochemical stain. Unlike resident peritoneal macrophages, ameboid microglia proliferate in vitro. Scanning electron microscopy shows that ameboid cells have short, spinous processes that can be distinguished from the ruffled surfaces of body macrophages. Our observations suggest that ameboid microglia are a distinct class of mononuclear phagocytic cells. Retinoic acid and dimethyl sulfoxide, agents known to accelerate differentiation in vitro, stimulate ameboid cells to develop thin processes several hundred microns in length. These “process-bearing” microglia eventually lose the capacity to engulf latex beads and to proliferate. They also show reductions in nonspecific esterase activity and in the binding of acetylated low- density lipoprotein. We suggest that in vitro ameboid microglia differentiate into nonphagocytic cells similar to ramified microglia found in normal adult brain. The isolation techniques described here provide the opportunity to study the composition and function of different microglial subpopulations during the development of the CNS.