The protease thrombin is a potent activator of various cell types. Thrombin cleaves and thereby activates its own seven-transmembrane-domain receptor which couples to G proteins. Thrombin also can inhibit neuronal differentiation, supposedly by degrading components of the extracellular matrix. Here we report that active thrombin induces immediate cell rounding and neurite retraction in differentiating N1E-115 and NG108-15 neural cells in serum-free culture. Serum (0.5-5% vol/vol) evokes similar responses, but the cell-rounding and neurite-retracting activity of serum is not attributable to thrombin. Neural cell rounding is transient, subsiding after 10-15 min, and subject to homologous desensitization, whereas retracted neurites rapidly degenerate. Thrombin action is inhibited by cytochalasin, but not colchicine. A novel 14-amino acid peptide agonist of the thrombin receptor fully mimics thrombin's morphoregulatory activity, indicating that thrombin-induced shape changes are receptor-mediated and not secondary to extracellular matrix degradation. Although thrombin receptors couple to phosphoinositide hydrolysis and Ca2+ mobilization, thrombin-induced shape changes appear to depend neither on the Ca2+/protein kinase C- nor the cyclic nucleotide-mediated signal transduction pathways; however, the morphological response to thrombin is blocked by pervanadate, an inhibitor of tyrosine phosphatases, and by broad-specificity kinase inhibitors. Our results suggest that the thrombin receptor communicates to an as-yet-uncharacterized effector to reorganize the actin cytoskeleton and to reverse the differentiated phenotype of neural cells.