To investigate the effect of estrogen on neuronal differentiation, especially on dopaminergic (DA) neurons, human neural stem cells (NSCs) were differentiated in the presence of 17β-estradiol. NSCs gave rise to tyrosine hydroxylase (TH)-positive neurons in vitro, the proportion of which was increased by 17β-estradiol. Increase in TH-positive neurons was abrogated by an estrogen receptor (ER) antagonist, ICI182780, suggesting ERs play a role in differentiation of DA neurons. The observation that ERs were expressed in both proliferating NSCs and postmitotic DA neurons suggested that increase in TH-positive neurons was due to induction and support of DA neurons. 17β-Estradiol also increased the number of DA neurons derived from human NSCs in vivo when the cells were grafted into mouse brains. These results support a possible role for estrogen in the transplantation of NSCs for Parkinson's disease. © 2004 Wiley-Liss, Inc.