Parkinson's disease is a widespread condition caused by the loss of midbrain neurons that synthesize the neurotransmitter dopamine. Cells derived from the fetal midbrain can modify the course of the disease, but they are an inadequate source of dopamine-synthesizing neurons because their ability to generate these neurons is unstable. In contrast, embryonic stem (ES) cells proliferate extensively and can generate dopamine neurons. If ES cells are to become the basis for cell therapies, we must develop methods of enriching for the cell of interest and demonstrate that these cells show functions that will assist in treating the disease. Here we show that a highly enriched population of midbrain neural stem cells can be derived from mouse ES cells. The dopamine neurons generated by these stem cells show electrophysiological and behavioural properties expected of neurons from the midbrain. Our results encourage the use of ES cells in cell-replacement therapy for Parkinson's disease.