The results of several recent studies suggest that human umbilical cord blood (HUCB)-derived cells have the potential to undergo neural differentiation both in vitro and in vivo. Transplantation into the embryonic ventricular zone provides a unique opportunity to study the migration and differentiation of nonneural somatic progenitor cells in response to instructive cues within the developing neuroepithelium. We isolated an adherently growing population of HUCB-derived cells expressing CD13, CD29, CD49e, CD71, CD73, CD166, Flk-1, and vimentin but lacking CD34 and CD45. On transplantation into the ventricles of embryonic day 16.5 rat embryos, these cells formed subventricular clusters that extended into a variety of host brain regions, including striatum, cortex, hippocampus, thalamus, hypothalamus, tectum, pons, and cerebellum. Donor cells identified with an antibody to human nuclei or human-specific DNA in situ hybridization maintained expression of their original marker antigens and showed no expression of the neural markers MAP2 and NeuN (neurons), GFAP (astrocytes), and CNP (oligodendrocytes). In contrast to grafted primary neural cells, they remained largely confined to subventricular clusters with little evidence for intraparenchymal integration. Thus, the neurogenic environment of the embryonic ventricular zone does not promote the elaboration of a neural phenotype in HUCB-derived cells.