NT2 cells are a transfectable human embryonal carcinoma cell line, that can be differentiated into postmitotic neuron-like cells (NT2N cells), and transplanted into rodent brains. Differentiation requires a 5-week-long treatment with retinoic acid prior to transplantation. Here, we show that this step can be omitted, and that undifferentiated NT2 cells migrate over long distances and differentiate into both neuron- and oligodendrocyte-like cell types upon grafting into brains of immunocompetent newborn mice. Grafted cells can be traced by fluorogold, with no evidence for tumor formation. Our approach provides an experimental model system which allows the immunohistological and biochemical study of neuronal and glial differentiation of human cells in vivo, and which may be suitable as an in vivo model for pharmacological studies.