Using an embryoid body (EB) culture system, we developed a functional organ-like cluster—a “gut”—from mouse embryonic stem (ES) cells (ES gut). Each ES gut exhibited spontaneous contractions but did not exhibit distinct peristalsis-like movements. In these spontaneously contracting ES guts, dense distributions of interstitial cells of Cajal (c-kit [a transmembrane receptor that has tyrosine kinase activity]-positive cells; gut pacemaker cells) and smooth muscle cells were discernibly identified; however, enteric neural ganglia were absent in the spontaneously differentiated ES gut. By adding brain-derived neurotrophic factor (BDNF) only during EB formation, we for the first time succeeded in in vitro formation of enteric neural ganglia with connecting nerve fiber tracts (enteric nervous system [ENS]) in the ES gut. The ES gut with ENS exhibited strong peristalsis-like movements. During EB culture in BDNF+ medium, we detected each immunoreactivity associated with the trk proto-oncogenes (trkB; BDNF receptors) and neural crest marker, proto-oncogene tyrosine-protein kinase receptor ret precursor (c-ret), p75, or sox9. These results indicated that the present ENS is differentiated from enteric neural crest-derived cells. Moreover, focal stimulation of ES guts with ENS elicited propagated increases in intracellular Ca2+ concentration ([Ca2+]i) at single or multiple sites that were attenuated by atropine or abolished by tetrodotoxin. These results suggest in vitro formation of physiologically functioning enteric cholinergic excitatory neurons. We for the first time succeeded in the differentiation of functional neurons in ENS by exogenously adding BDNF in the ES gut, resulting in generation of distinct peristalsis-like movements.