Lesions in specific areas of the rat motor cortex generate deficits related to fine movement performance affecting the forelimb. We have previously shown that transplants of embryonic frontal cortex ameliorate these motor deficits. Amelioration has been associated with a functional integration of the transplant due to the connections established between the host brain and the graft. In the current investigation, the electrophysiological properties of the transplanted cells and the connections both intra-transplant and with the adjacent host cortex are analyzed. For this purpose, adult rats with a motor cortical lesion plus a fetal cortical graft were used. Neurons in the transplant were recorded using sharp electrodes or whole-cell recordings in brain slices. Application of intracellular depolarizing pulses showed two patterns of cell firing: regular and burst spiking. Postsynaptic responses evoked by both, intra-transplant and adjacent host cortex stimulation were mediated by glutamic acid acting on non-NMDA and NMDA receptors, and were modulated by both cholinergic and GABAergic drugs. In some cells, supra-threshold intra-transplant stimulation generated an epileptiform-like discharge, suggesting an imbalance between excitatory and inhibitory synapses. As expected, immunohistochemistry for cholinergic and GABAergic markers confirmed the electrophysiological results. Thus we show electrophysiological and immunohistochemical evidence supporting the functional development and integration of grafted cells into the host neocortex of adult animals.