Stem cells have great potential for clinical application because of their self-renewal property and ability to differentiate into many types of cells, but because there are ethical and biological limitations with current sources of stem cells, the search continues for more suitable sources of multipotent cells. We have reported previously on a population of multipotent cells isolated from the human term placenta, an ethically unproblematic and easily available source of tissue. These placenta-derived multipotent cells (PDMCs) can differentiate into lineages of mesenchymal tissues, including osteoblasts and adipocytes, as well as non-mesenchymal tissue of neuron-like cells. We further examined the ability of PDMCs to differentiate into all 3 types of neural cells--neurons, astrocytes, and oligodendrocytes--under various induction conditions, including retinoic acid (RA), 1-methyl-3-isobutylxanthine (IBMX), and co-culture with neonatal rat brain cells. PDMCs exhibited outgrowth of processes and the expression of neuron-specific molecules such as neuron-specific enolase upon induction. Co-culture with neonatal rat brain cells also induced neural differentiation. Our results indicate that PDMCs can be differentiated into neural cell types of the human nervous system upon exposure to RA, IBMX, or primary rat brain cells.