Research towards potential curative transplantation of human embryonic stem (hES) cell-derived grafts in a variety of diseases has become an important topic since the successful derivation and propagation of hES cells from the inner cell mass of a blastocyst. However, clinical applicability can only be established after intensive laboratory studies that should elaborate on two major topics: A) the development of efficient, controlled and stable hES cell differentiation protocols for any specific cell type, and B) the induction of immunological tolerance against transplanted allogeneic hES cell-derived cell types. This review will briefly discuss: A) current possibilities in hES cell differentiation, followed by the development of viral, DNA and mRNA-based gene transfer strategies for hES cells, and B) possible immune modulation strategies for inducing immune tolerance against allogeneic hES cell transplants.