Research on the cell fate determination of embryonic stem cells is of enormous interest given the therapeutic potential in regenerative cell therapy. Human embryonic stem cells (hESCs) have the ability to renew themselves and differentiate into all three germ layers. The main focus of this study was to examine factors affecting derivation and further proliferation of multipotent neuroepithelial (NEP) cells from hESCs. hESCs cultured in serum-deprived defined medium developed distinct tube structures and could be isolated either by dissociation or adherently. Dissociated cells survived to form colonies of cells characterized as NEP when conditioned medium from human hepatocellular carcinoma HepG2 cell line (MEDII) was added. However, cells isolated adherently developed an enriched population of NEP cells independent of MEDII medium. Further characterization suggested that they were NEP cells because they had a similar phenotype profile to in vivo NEP cells and expression SOX1, SOX2, and SOX3 genes. They were positive for Nestin, a neural intermediate filament protein, and Musashi-1, a neural RNA-binding protein, but few cells expressed further differentiation markers, such as PSNCAM, A2B5, MAPII, GFAP, or O4, or other lineage markers, such as muscle actin, α fetoprotein, or the pluripotent marker Oct4. Further differentiation of these putative NEP cells gave rise to a mixed population of progenitors that included A2B5-positive and PSNCAM-positive cells and postmitotic neurons and astrocytes. To proliferate and culture these derived NEP cells, ideal conditions were obtained using neurobasal medium supplemented with B27 and basic fibroblast growth factor in 5% oxygen. NEP cells were continuously propagated for longer than 6 months without losing their multipotent cell characteristics and maintained a stable chromosome number.