In some rodent models, there is evidence that hematopoietic stem cells (HSC) can differentiate into neural cells. However, it is not known whether humans share this potential, and, if so, what conditions are sufficient for this transdifferentiation to occur. We addressed this question by assessing the ability of fetal human liver CD34+/CD133+/CD3- hematopoietic stem cells to generate neural cells and astrocytes in culture. We cultured fetal liver-derived hematopoietic stem cells in human astrocyte culture-conditioned medium or using a method wherein growing human astrocytes were separated from cultured, nonadherent hematopoietic stem cells by a semipermeable membrane in a double-chamber co-culture system. Hematopoietic stem cell cultures were probed for neural progenitor cell marker expression (nestin and bone morphogenic protein-2 [BMP-2]) during growth in both culture conditions. RT-PCR, western blotting, and immunocytochemistry assays showed that cells cultured in either condition expressed nestin mRNA and protein and BMP-2 mRNA. HSC similarly cultured in nonconditioned medium or in the absence of astrocytes did not express either marker. Cells expressing these neural markers were transferred and cultured on poly-D-lysine-coated dishes with nonconditioned growth medium for further study. Immunocytochemistry demonstrated that these cells differentiated into astrocytes after 8 days in culture as indicated by their morphology and expression of the astrocytic markers glial fibrillary acidic protein (GFAP) and S100, as well as by their rate of proliferation, which was identical to that of freshly isolated fetal brain astrocytes. These findings demonstrate that neural precursor gene expression can be induced when human hematopoietic stem cells are exposed to a suitable microenvironment. Furthermore, the neural stem cells generated in this environment can then differentiate into astrocytes. Therefore, human hematopoietic stem cells may be an alternative resource for generation of neural stem cells for therapy of central nervous system defects resulting from disease or trauma.