Stroke and spinal cord or brain injury often result in cavity formation. Stem cell transplantation in combination with tissue engineering has the potential to fill such a cavity and replace lost neurons. Several hydrogels containing unique features particularly suitable for the delicate nervous system were tested by determining whether these materials were compatible with fetal human neural stem cells (hNSCs) in terms of toxicity and ability to support stem cell differentiation in vitro. The hydrogels examined were pluronic F127 (PF127), Matrigel and PuraMatrix. We found that PF127, in a gelated (30%) form, was toxic to hNSCs, and Matrigel, in a gelated (1-50%) form, prevented hNSCs' normal capacity for neuronal differentiation. In contrast, PuraMatrix was the most optimal hydrogel for hNSCs, since it showed low toxicity when gelated (0.25%) and retained several crucial properties of hNSCs, including migration and neuronal differentiation. Further optimization and characterization of PuraMatrix is warranted to explore its full potential in assisting neural regeneration in vivo.