Activation and proliferation of glial cells and their progenitors is a key process of neuroinflammation associated with many neurodegenerative disorders. Under neuropathological conditions where glial cell activation and proliferation is evident, controlling the population of glia might be of therapeutic importance. The proliferative action of the cytokine tumor necrosis factor alpha (TNFα) on microglia has been reported, but the molecular mechanism of TNFα regulation of glial cell proliferation is largely unknown. Using a model of organotypic hippocampal-entorhinal cortex (HEC) slice culture, we investigated the role of ATP-P2X(7) receptor signaling in glial proliferation by TNFα. Populations of proliferating cells in HEC culture were labeled with 5-bromo-2'-deoxyuridine (BrdU). Treatment with TNFα induced strong expression of P2X(7) receptor mRNA and immunoreactivity in BrdU+ cells while markedly increasing proliferation of BrdU+ cells. In addition, TNFα increased aquaporin 4 (AQP4) expression, an ion channel involved in glial proliferation. The proliferative action of TNFα was attenuated by blocking the P2X(7) receptors with the specific antagonists oxATP, BBG, and KN62, or by lowering extracellular ATP with ATP hydrolysis apyrase. Basal proliferation of BrdU+ cells was also sensitive to blockade of ATP-P2X(7) signaling. Furthermore, TNFα activation of P2X(7) receptors appear to regulate AQP4 expression through protein kinase C cascade and down regulation of AQP4 expression can reduce TNFα-stimulated BrdU+ cell proliferation. Taken together, these novel findings demonstrate the importance of ATP-P2X(7) signaling in controlling proliferation of glial progenitors under the pathological conditions associated with increased TNFα.