This study identifies a stromal cell-derived inducing activity (SDIA) that promotes neural differentiation of mouse embryonic stem (ES) cells. SDIA, which accumulates on the surface of PA6 stromal cells, efficiently induces neuronal differentiation of cocultured ES cells in serum-free conditions without the need for retinoic acid or embryoid bodies. BMP4, which acts as an antineural morphogen in Xenopus, suppresses SDIA-induced neuralization and promotes epidermal differentiation. The SDIA method produces a high proportion of tyrosine hydroxylase-positive neurons, which are dopaminergic neurons. When transplanted into the mouse striatum, these neurons integrate and remain positive for tyrosine hydroxylase expression. This method provides a powerful tool for both basic neuroscience research and therapeutic applications, particularly for cell replacement therapy of Parkinson's disease.This study identifies a stromal cell-derived inducing activity (SDIA) that promotes neural differentiation of mouse embryonic stem (ES) cells. SDIA, which accumulates on the surface of PA6 stromal cells, efficiently induces neuronal differentiation of cocultured ES cells in serum-free conditions without the need for retinoic acid or embryoid bodies. BMP4, which acts as an antineural morphogen in Xenopus, suppresses SDIA-induced neuralization and promotes epidermal differentiation. The SDIA method produces a high proportion of tyrosine hydroxylase-positive neurons, which are dopaminergic neurons. When transplanted into the mouse striatum, these neurons integrate and remain positive for tyrosine hydroxylase expression. This method provides a powerful tool for both basic neuroscience research and therapeutic applications, particularly for cell replacement therapy of Parkinson's disease.