We generated spinal motoneurons from embryonic stem (ES) cells to determine the developmental potential of these cells in vitro and their capacity to replace motoneurons in the adult mammalian spinal cord. ES cell-derived motoneurons extended long axons, formed neuromuscular junctions, and induced muscle contraction when cocultured with myoblasts. We transplanted motoneuron-committed ES cells into the spinal cords of adult rats with motoneuron injury and found that approximately 3,000 ES cell-derived motoneurons (25% of input) survived for >1 month in the spinal cord of each animal. ES cell-derived axonal growth was inhibited by myelin, and this inhibition was overcome by administration of dibutyryl cAMP (dbcAMP) or a Rho kinase inhibitor in vitro and in vivo. In transplanted rats infused with dbcAMP, approximately 80 ES cell-derived motor axons were observed within the ventral roots of each animal, whereas none were observed in transplanted rats not treated with dbcAMP. Because these cells replicate many of the developmental and mature features of true motoneurons, they are an important biological tool to understand formation of motor units in vitro and a potential therapeutic tool to reconstitute neural circuits in vivo.