Chromaffin cells and sympathetic neurons develop from a common neural crest-derived progenitor cell. The developmental fate of this cell differs depending upon whether it migrates to the sympathetic ganglion or to the adrenal gland primordium, suggesting that local environmental signals control its differentiation. Glucocorticoid (GC) is a good candidate for an important adrenal environmental signal. These steroids are known to regulate PNMT, an adrenal-specific enzyme. However, in vivo observations suggest that the adrenal microenvironment influences the phenotype of sympatho-adrenal progenitor cells as early as E14.5, 2 days before PNMT is first expressed by developing chromaffin cells. Using cDNA probes, we find that GC receptor mRNA can be detected in the embryonic adrenal at least one full day before the initial appearance of PNMT mRNA. This observation is compatible with the idea that the apparent early influence of the adrenal microenvironment reflects the action of GC on progenitors which have migrated into this environment. In support of this, we show that similar influences can be exerted by GC on PC12 cells, which contain GC receptor mRNA but do not express or induce PNMT mRNA. Taken together, these data suggest that other factors in addition to the presence of the GC receptor may be necessary for the developmental appearance of PNMT expression.