Nerve growth factor (NGF) stimulation of pheochromocytoma PC12 cells transiently increased the intracellular concentration of reactive oxygen species (ROS). This increase was blocked by the chemical antioxidant N-acetylcysteine and a flavoprotein inhibitor, diphenylene iodonium. NGF responses of PC12 cells, including neurite outgrowth, tyrosine phosphorylation, and AP-1 activation, was inhibited when ROS production was prevented by N-acetylcysteine and diphenylene iodonium. The expression of dominant negative Rac1N17 blocked induction of both ROS generation and morphological differentiation by NGF. The ROS produced appears to be H(2)O(2), because the introduction of catalase into the cells abolished NGF-induced neurite outgrowth, ROS production, and tyrosine phosphorylation. These results suggest that the ROS, perhaps H(2)O(2), acts as an intracellular signal mediator for NGF-induced neuronal differentiation and that NGF-stimulated ROS production is regulated by Rac1 and a flavoprotein-binding protein similar to the phagocytic NADPH oxidase.