The mechanisms by which activation of excitatory amino acid receptors is coupled to the regulation of gene transcription were studied using cultured hippocampal neurons from neonatal rats. Voltage recording, calcium imaging, specific RNA analysis and immunocytochemistry were carried out on sister cultures. This allowed analysis of the expression of functional glutamate receptor subtypes, examination of their role in controlling intracellular free calcium ([Ca2+]i), and determination of their relative contributions to the transcriptional regulation of six immediate early genes c-fos, fosB, c-jun, junB, zif/268 (also termed Egr-1; NGFI-A; Krox-24) and nur/77 (also termed NGFI-B). Expression of all six immediate early genes was induced in hippocampal neurons by glutamate treatment. Nuclear run-on assays demonstrated that this induction occurred at the transcriptional level. Activation of the N-methyl-D-aspartate subtype of glutamate receptor was necessary and sufficient for the transcriptional response. Non-N-methyl-D-aspartate receptors, while present in cultured hippocampal neurons, contributed relatively little to the regulation of transcription. Calcium imaging showed that glutamate-induced changes in [Ca2+]i were almost entirely mediated by N-methyl-D-aspartate receptors, rather than by L-type voltage-sensitive calcium channels. Previous studies have shown that stimulation with selective agonists of either N-methyl-D-aspartate receptors, non-N-methyl-D-aspartate receptors, or L-type calcium channels can lead to an increase in [Ca2+]i and c-fos expression. Here we demonstrate that in our hippocampal culture system glutamate controls [Ca2+]i and induces immediate early gene transcription primarily by activating N-methyl-D-aspartate receptors.