Pre-clinical efforts of grafting human embryonic stem cell (hESC)-derived neural precursors have been hampered by problems ranging from graft rejection to overgrowth and tumor formation. The ability to detect such potential complications sensitively and reliably in clinically relevant contexts will rest upon the implementation of suitable non-invasive imaging technologies for continuously probing graft survival, proliferation, and migration. Neural precursors were transduced ex vivo using a lentiviral-mediated gene delivery system expressing firefly D-luciferase, under the control of a cytomegalovirus promoter. Transduced cells revealed no loss of cellular morphology, proliferative capacity, or neural phenotype in vitro. As a novel approach to monitoring the fate of human grafts within the living brain, we adapted optical bioluminescence imaging to assess long-term graft viability in immunodeficient mouse models transplanted with genetically engineered human neural precursor cells. We additionally applied this technology to immunocompetent models for detecting and characterizing the time course of graft rejection. Using this strategy, we define statistically relevant imaging criteria that can predict graft rejection or overgrowth. In conclusion, our data suggest that optical bioluminescence imaging can serve as an essential tool for the development of hESC-based grafting strategies in the CNS.