The generation of induced neuronal cells from human bone marrow stromal stem cells (hBMSCs) provides new avenues for basic research and potential transplantation therapies for nerve injury and neurological disorders. However, clinical application must seriously consider the risk of tumor formation by hBMSCs, neural differentiation efficiency and biofunctions resembling neurons. Here, we co-cultured hBMSCs exposed to retinoic acid (RA) with human olfactory ensheathing cells (hOECs) to stimulate its differentiation into neural cells, and found that hBMSCs following 1 and 2 weeks of stimulation promptly lost their immunophenotypical profiles, and gradually acquired neural cell characteristics, as shown by a remarkable up-regulation of expression of neural-specific markers (Tuj-1, GFAP and Galc) and down-regulation of typical hBMSCs markers (CD44 and CD90), as well as a rapid morphological change. Concomitantly, in addition to a drastic decrease in the number of BrdU incorporated cells, there was a more elevated synapse formation (a hallmark for functional neurons) in the differentiated hBMSCs. Compared with OECs alone, this specific combination of RA and hOECs was significantly potentiated neuronal differentiation of hBMSCs. The results suggest that RA can enhance and orchestrate hOECs to neural differentiation of hBMSCs. Therefore, these findings may provide an alternative strategy for the repair of traumatic nerve injury and neurological diseases with application of the optimal combination of RA and OECs for neuronal differentiation of hBMSCs.