Acquisition of cell type-specific properties in the nervous system is likely a process of sequential restriction in developmental potential. At least two classes of pluripotent stem cells, neuroepithelial (NEP) stem cells and EGF-dependent neurosphere stem cells, have been identified in distinct spatial and temporal domains. Pluripotent stem cells likely generate central nervous system (CNS) and peripheral nervous system (PNS) derivatives via the generation of intermediate lineage-restricted precursors that differ from each other and from multipotent stem cells. Neuronal precursors termed neuronal-restricted precursors (NRPs), multiple classes of glial precursors termed glial-restricted precursors (GRPs), oligodendrocyte-type 2 astrocytes (O2As), astrocyte precursor cells (APCs), and PNS precursors termed neural crest stem cells (NCSCs) have been identified. Multipotent stem cells and restricted precursor cells can be isolated from embryonic stem (ES) cell cultures providing a non-fetal source of such cells. Analysis in multiple species illustrates similarities between rat, mouse, and human cell differentiation raising the possibility that similar factors and markers may be used to isolate precursor cells from human tissue or ES cells. Anat Rec (New Anat): 257:137–143, 1999. © 1999 Wiley-Liss, Inc.