SummaryBrain-derived neurotrophic factor (BDNF) is known to be a crucial regulator of neuronal survival and synaptic plasticity in the mammalian brain. Furthermore, BDNF positively influences differentiation of embryonic neural precursors, as well as that of neural stem cells from adult neurogenic niches. To study the impact of cell-released BDNF on neural differentiation of embryonic stem cells (ESCs), which represent an attractive source for cell transplantation studies, we have generated mouse ESC clones overexpressing BDNF-GFP by use of knock-in technology. After neural differentiation in vitro, we observed that ESC clones overexpressing BDNF-GFP gave rise to an increased number of neurons as compared to control ESCs. Neurons derived from BDNF-GFP-expressing ESCs harbored a more complex dendritic morphology and differentiated into the GABAergic lineage more than controls. Moreover, we show that ESC-derived neurons released BDNF-GFP in an activity-dependent manner and displayed similar electrophysiological properties as cortical neurons. Thus, our study describes the generation of ESCs stably overexpressing BDNF-GFP, which are ideally suited to investigate the ameliorating effects of BDNF in cell transplantation studies of various neuropathological conditions.