Neurotrophic factors hold promise for the treatment of neurodegenerative diseases. Intrathecal transplantation of polymer encapsulated cell lines genetically engineered to release neurotrophic factors provides a means to deliver them continuously behind the blood-brain barrier. Long-term delivery, however, may benefit from the use of conditionally mitotic cells to avoid the overgrowth observed with continuously dividing cell lines. Myoblast lines have all the advantages of dividing cell lines, i.e., unlimited availability, possibility for in vitro screening for the presence of pathogens, suitability for stable gene transfer and clonal selection. Furthermore they can be differentiated into a nonmitotic stage upon exposure to low-serum-containing medium. In this study, mouse C2C12 myoblasts were transfected with a pNUT expression vector containing the human ciliary neurotrophic factor (CNTF) gene. hCNTF expression and bioactivity were demonstrated by Northern blot, ELISA assay, and measurement of choline acetyltransferase (ChAT) activity in embryonic spinal cord motor neuron cultures. One C2C12 clone was found to secrete 200 ng of CNTF/10(6) cells per day. The rate of secretion of hCNTF was not altered upon differentiation of C2C12 myoblasts. A bromodeoxyuridine (BrdU) proliferation assay indicated that approximately 12% of the myoblasts continue to divide after 4 days in low-serum-containing medium. The presence of the herpes simplex thymidine kinase gene (HSV-tk) in the expression vector, however, provides a way to eliminate these dividing myoblasts upon exposure to ganciclovir, therefore increasing the safety of the encapsulation technology using established cell lines. Encapsulated hCNTF-C2C12 cells can partially rescue motor neurons from axotomy-induced cell death. In adult rats, intrathecal implantation of encapsulated hCNTF-C2C12 cells or control C2C12 confirmed the long-term survival of these cells and their potential use as a source of neurotophic factors for the treatment of neurodegenerative diseases.