Dramatic cerebral responses following brain injury (TBI) comprise inflammation, cell death, and modulation of trophic factor release. These cerebral modulations might induce and /or attenuate acute neuronal damage. Here, we investigated the effect of tissue extract derived from healthy (HBE) or injured rat brain (TBE) on the differentiation of cultured embryonic stem cells in vitro. Rats were sacrificed at t = 45 minutes following lateral fluid-percussion injury and extracts of cerebral tissue were prepared from 4-6 healthy or injured rat brain hemispheres. Murine embryonic stem cells (CGR8) cultured in serum-free medium were then conditioned for a week with HBE or TBE. Omission of serum from the culture medium induced neural differentiation of CGR8 stem cells, as indicated by a significant time dependent down-regulation of oct-4 with a concomitant upregulation of nestin after 7 days. In parallel cell loss was observed that seemed to be largely due to apoptotic cell death. In TBE treated cells, on the other hand, a significant amplification of apoptotic cell death, enhancement of nestin and MAP2 expression and marked morphological changes such as axonal-like outgrowth was observed within 3 days of conditioning. Treatment of stem cells with HBE resulted in less pronounced neuronal differentiation processes. Axonal-like outgrowth was not observed. Our data suggest that during the early acute phase of traumatic injury the cerebral environment is disposed to detrimental as well as potent protective signals that seem to rapidly induce neurogenic processes.