Multiple sclerosis is an inflammatory disease of the central nervous system characterized by inflammation, demyelination, axonal degeneration and accumulation of neurological disability. Previously, we demonstrated that stem cells constitute a possible endogenous source for remyelination. We now addressed the question of whether neurogenesis can occur in neuroinflammatory lesions. We demonstrated that, in experimental autoimmune encephalomyelitis, induced in rats 1,1'-dioctadecyl-6,6'-di(4sulphopentyl)-3,3,3',3'tetramethylindocarbocyanin(DiI)-labelled ependymal cells not only proliferated but descendants migrated to the area of neuroinflammation and differentiated into cells expressing the neuronal markers beta-III-tubulin and NeuN. Furthermore, these cells were immunoreactive for bromodeoxyuridine and PCNA, markers for cells undergoing cell proliferation. Using the whole-cell patch-clamp technique on freshly isolated 1, DiI-labelled cells from spinal cord lesions we demonstrated the ability of these cells to fire overshooting action potentials similar to those of immature neurones. We thus provide the first evidence for the initiation of neurogenesis in neuroinflammatory lesions in the adult spinal cord.