Embryonic stem (ES) cells have been suggested as candidate therapeutic tools for cell replacement therapy in neurodegenerative disorders. However, limitations for the use of these cells lie in our restricted knowledge of the molecular mechanisms involved in their specialized differentiation and in the risk of tumor formation. Recent findings suggest that the EGF-CFC protein Cripto is a key player in the signaling pathways controlling neural induction in ES cells. Here we show that in vitro differentiation of Cripto−/− ES cells results in increased dopaminergic differentiation and that, upon transplantation into Parkinsonian rats, they result in behavioral and anatomical recovery with no tumor formation. The use of knockout ES cells that can generate dopamine cells while eliminating tumor risk holds enormous potential for cell replacement therapy in Parkinson's disease.