Embryonic stem cell (ES) derived neurons represent a potential source of material for cellular transplantation into the brain. The ability to introduce transgenes into ES, to select and characterize clonal lines, and to direct those lines into neural phenotypes, permits opportunities to develop cell-based therapeutic strategies for intractable neurological diseases, such as epilepsy. Previous studies have revealed a potential therapeutic effect of the inhibitory neurotransmitter GABA in animal models of epilepsy. In this study we have genetically engineered the mouse ES cell line ZHTc6 to regulatably over-express the GABA-synthesizing enzyme GAD using lipofection. Clonally selected cell lines were differentiated into predominantly neuronal phenotypes by change of growth medium composition. The amount of GABA produced by differentiated and undifferentiated cell lines was measured in vitro using HPLC. In a pilot study, the undifferentiated, GABA over-expressing cells were transplanted into the hippocampus of a mouse. Transplanted cells were characterized using the reporter molecule α-galactosidase. In future experiments, the potential for transplanted ES derived neurons to suppress epileptic seizures will be measured using telemetry analysis. We will also conduct additional experiments focusing on the differentiation of GABA over-producing stem cells into predominantly glial phenotypes, for potential higher GABA expression and increased survival. These studies should increase our understanding of the therapeutic potential of embryonic stem cells.