Prolonged muscle denervation resulting from motor neuron (MN) damage leads to atrophy and degeneration of neuromuscular junctions (NMJs), which can impart irreversible damage. In this study, we ask whether transplanted embryonic stem (ES) cells differentiated into MNs can form functional synapses with host muscle, and if so what effects do they have on the muscle. After transplantation into transected tibial nerves of adult mice, ES-cell-derived MNs formed functional synapses with denervated host muscle, which resulted in the ability to produce average tetanic forces of 44% of nonlesioned controls. ES-cell-derived motor units (MUs) had mean force values and ranges similar to control muscles. The number of type I fibers and fatigue resistance of the MUs were increased, and denervation-associated muscle atrophy was significantly reduced. These results demonstrate the capacity for ES-cell-derived MNs not only to incorporate into the adult host tissue, but also to exert changes in the target tissue. By providing the signals normally active during embryonic development and placing the cells in an environment with their target tissue, ES cells differentiate into MNs that give rise to functional MU output which resembles the MU output of endogenous MNs. This suggests that these signals combined with those present in the graft environment, lead to the activation of a program intended to produce a normal range of MU forces.