Although embryonic stem (ES) cells are capable of unlimited proliferation and pluripotent differentiation, effective preparation of neural stem cells from ES cells are not achieved. Here, we have directly generated under the coculture with dissociated primary neurosphere cells in serum-free medium and the same effect was observed when ES cells were cultured with conditioned medium of primary neurosphere culture (CMPNC). ES-neural stem cells (NSCs) could proliferate for more than seven times and differentiate into neurons, astrocytes, and oligodendrocytes in vitro and in vivo. The responsible molecule in CMPNC was confirmed by matrix-assisted laser desorption͞ionization time-of-flight mass spectrometry, which turned out to be cystatin C. Purified cystatin C in place of the CMPNC could generate ES-NSCs efficiently with self-renewal and multidifferentiation potentials. These results reveal the validity of cystatin C for generating NSCs from ES cells.coculture system ͉ conditioned medium of primary neurosphere culture N eurogenesis is considered to be the most complex event of organogenesis during embryonic development and involves a precise signaling, along with cellular interaction cascade, to generate the functional cellular networks. The embryonic organizer allows cells in its vicinity to execute their default neural program by emitting bone morphogenetic protein antagonists (1, 2). However, other works suggest a more complex mechanism (3-5).Neural stem cells (NSCs) are the self-renewal, multipotent cells that generate neurons, astrocytes, and oligodendrocytes (6, 7). They have great potential as a therapeutic tool for the repair of a number of central nervous system (CNS) disorders. Several in vitro systems allowing derivation of neuronal progeny from embryonic stem (ES) cells, which differentiate into all of the cell fates in a developing embryo, have been described. However, attempts to exclusively generate NSCs or neural progenitor cells from ES cells are restricted. It has been shown that neural fates emerge from ES cells in the serum-free conditions (8, 9). Although these procedures are noteworthy, both the quality and the quantity of ES-derived neural cells are not sufficient for further examination or clinical applications. Higher levels of neural differentiation are achieved by treatment of embryoid bodies with retinoic acid (RA) in the presence of FCS (10, 11) or by coculture with particular stromal cell lines (12, 13). The action of RA is pleiotropic (14, 15), whereas the effect of several stromal cell lines is attributed to an undefined neural inducing activity. These factors severely restrict the ability to use cells cultured with FCS or with particular stromal feeder cells for therapeutic treatments.Here, we developed an efficient system for the generation of ES cell-derived NSCs (ES-NSCs) during coculture with dissociated neurosphere cells without a need for FCS or feeder cells, which creates a bottleneck for therapeutic methods. We demonstrated that neurosphere-derived factor (NDF), which induces...