Neural stem cell (NSC) transplantation has been proposed as a future therapy for neurodegenerative disorders. However, NSC transplantation will be hampered by the limited number of brain donors and the toxicity of immunosuppressive regimens that might be needed with allogeneic transplantation. These limitations may be avoided if NSCs can be generated from clinically accessible sources, such as bone marrow (BM) and peripheral blood samples, that are suitable for autologous transplantation. We report here that NSCs can be generated from human BM-derived mesenchymal stem cells (MSCs). When cultured in NSC culture conditions, 8% of MSCs were able to generate neurospheres. These MSC-derived neurospheres expressed characteristic NSC antigens, such as nestin and musashi-1, and were capable of self-renewal and multilineage differentiation into neurons, astrocytes, and oligodendrocytes. Furthermore, when these MSC-derived neurospheres were cocultured with primary astrocytes, they differentiate into neurons that possess both dendritic and axonal processes, form synapses, and are able to fi re tetrodotoxin-sensitive action potentials. When these MSC-derived NSCs were switched back to MSC culture conditions, a small fraction of NSCs (averaging 4-5%) adhered to the culture fl asks, proliferated, and displayed the morphology of MSCs. Those adherent cells expressed the characteristic MSC antigens and regained the ability to differentiate into multiple mesodermal lineages. Data presented in this study suggest that MSCs contain a small fraction (averaging 4-5%) of a bipotential stem cell population that is able to generate either MSCs or NSCs depending on the culture conditions.