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Directing embryonic stem (ES) cells to differentiate into functional motoneurons has proven to be a strong technique for studying neuronal development as well as being a potential source of tissue for cell replacement therapies involving spinal cord disorders. Unfortunately, one of the mitogenic factors (i.e., sonic hedgehog agonist) used for directed differentiation is not readily available, and thus this technique has not been widely accessible. Here, we present a novel and simple method to derive motoneurons from ES cells using readily attainable reagents. ES cells were derived from a mouse in which enhanced green fluorescent protein (eGFP) was linked to a motoneuron specific promoter. The cells were plated onto a monolayer of 293 EcR-Shh cells that carry an integrated construct for the expression of sonic hedgehog (Shh) under ecdysone-inducible control. To initiate motoneuron differentiation, 293 EcR-Shh:ES cell cocultures were treated with ponasterone A (PA) and retinoic acid for 5 days. PA induces ecdysone, and thus drives Shh expression. To assess differentiation, putative ES cellderived motoneurons were studied immunocytochemically and cultured on chick myotubes for functional analysis. We found that ES cells differentiated into eGFP ؉ cells that expressed transcription factors typical of motoneurons. Furthermore, ES cell-derived motoneurons were capable of forming functional connections with muscle fibers in vitro. Finally, when transplanted into the developing chick spinal cord, ES cell-derived motoneurons migrated to the ventral horn and projected axons to appropriate muscle targets. In summary, this simple treatment paradigm produces functional motoneurons that can be used for both developmental and preclinical studies.