Hematopoietic stem cells have been proposed as being able to give rise to cells of non-hematopoietic lineages. Several reports show that HSC are able to differentiate into neural cells both in vivo and in vitro. Recently, it has also been shown that human HSCs (hHSCs) can generate functional neurons following transplantation into the embryonic chicken neural tube. In order to investigate hHSCs neurogenic potential in more detail, we did a series of experiments transplanting highly purified CD34+ cells from the human bone marrow into the neural tube of chicken embryos following unilateral lesions. We assessed hematopoietic to neural transition by following the expression of two panels of antigens expressed specifically by each of the cell types. In addition we investigated functional properties of the human cells that integrated into the chicken spinal cord by electrophysiological recording. Finally, we investigated whether fusion between hHSC and chicken cells was a factor contributing to the observed results. We find that many of the CD34+ cells that integrate into the embryonic neural tube start expressing neural proteins including MAP-2, Neurofilament, NeuN and Tuj-1 within 4 days of incubation. In addition, electrophysiological recording shows that some of the human cells (within 10 days post implantation) exhibit active membrane properties and can fire overshooting action potentials following stimulation. In parallel with neural differentiation, the cells stop expressing the hematopoietic markers CD 34, CD 45 and CD 38, suggesting a full transition from hematopoietic to neural fate. Finally, the human cells never express chicken specific markers suggesting that it is highly unlikely that host-graft cell fusion is a contributing factor to the observed results. We conclude that the human hematopoietic stem cells abandon their endogenous lineage and adopt a neural fate induced by signaling factors found in the regenerating microenvironment of the embryonic neural tube.