We have generated a murine embryonic stem cell line constitutively expressing L1 at all stages of neural differentiation to investigate the effects of L1 overexpression on stem cell proliferation, migration, differentiation, cell death, and ability to influence drug-induced rotation behavior in an animal model of Huntington's disease. L1-transfected cells showed decreased cell proliferation in vitro, enhanced neuronal differentiation in vitro and in vivo, and decreased astrocytic differentiation in vivo without influencing cell death compared with nontransfected cells. L1 overexpression also resulted in an increased yield of GABAergic neurons and enhanced migration of embryonic stem cell-derived neural precursor cells into the lesioned striatum. Mice grafted with L1-transfected cells showed recovery in rotation behavior 1 and 4 weeks, but not 8 weeks, after transplantation compared with mice that had received nontransfected cells, thus demonstrating for the first time that a recognition molecule is capable of improving functional recovery during the initial phase in a syngeneic transplantation paradigm.