Embryonal carcinoma (EC) cells provide a caricature of pluripotent embryonic stem (ES) cells and may be used as surrogates for investigating the mechanisms that regulate cell differentiation during embryonic development. NTERA-2 is a human EC cell line that differentiates in response to retinoic acid yielding cells that include terminally differentiated neurons. The expression of genes known to be involved in the formation of the vertebrate nervous system was examined during retinoic acid-induced NTERA-2 differentiation. Differentiation of these human EC cells into neurons could be divided into three sequential phases. During phase 1, in the first week of differentiation, hath1 mRNA showed a small transient increase that correlated with the rapid accumulation of nestin message, a marker of neuroprogenitors. Transcripts of nestin were quickly downregulated during phase 2 as expression of neuroD1, characteristic of neuroprogenitors exiting the cell cycle, was induced. A neural cell surface antigen, detected by the monoclonal antibody A2B5, was expressed by cells exiting the cell cycle, correlating with the expression of neuroD1 as the cells became post-mitotic. Markers of mature neural cells (e.g. synaptophysin and neuron-specific enolase) were subsequently increased during phase 3 and were maintained. This regulated pattern of gene expression and commitment to the neural lineage indicates that differentiation of NTERA-2 neurons in vitro follows a similar pathway to that observed by neural ectodermal precursors during vertebrate neurogenesis in vivo.