Previous studies demonstrated that the level of epidermal growth factor receptors (EGF-Rs) expressed by progenitor cells in the newborn (P0) rat retina was limiting for the generation of Muller glial cells but not for proliferation. To determine whether EGF-R signaling biases cells to generate a specific cell type or regulates more general processes during progenitor cell development, we have introduced extra copies of the EGF-R into progenitor cells at earlier stages (E15 and E18), when different cell types are produced. We show that progenitor cells in early embryonic retina (E15) normally express lower levels of EGF-Rs than progenitor cells in later retina (E18 and P0). Whereas lower levels of stimulation of endogenous and virally transduced EGF-Rs enhanced proliferation, higher levels reduced proliferation, resulting in premature differentiation. At E15, very few EGF-R-infected progenitor cells differentiated prematurely into Muller glial cells, unlike E18 and P0 cells, even when they were exposed to an older retinal environment. Higher levels of EGF-R-mediated signaling alone therefore do not specify a glial fate, indicating that competence to generate glia is temporally regulated by additional mechanisms. The differences in EGF-R expression observed among retinal progenitor cells at distinct developmental stages may instead help to define signaling thresholds which delay or accelerate their differentiation. Copyright 1998 Academic Press.