In this report, we describe the spontaneous malignant transformation of long-term cultured human fetal striatum neural stem cells (hsNSCs, passage 17). After subcutaneous transplantation of long-term cultured hsNSCs into immunodeficient nude mice, 2 out of 15 mice formed xenografts which expressed neuroendocrine tumor markers CgA and NSE. T1 cells, a cell line that we derived from one of the two subcutaneous xenografts, have undergone continuous expansion in vitro. These T1 cells showed stem cell-like features and expressed neural stem cell markers nestin and CD133. The T1 cells were involved in abnormal karyotype, genomic instability and fast proliferation. Importantly, after long-term in vitro culture, the T1 cells did not result in subcutaneous xenografts, but induced intracranial tumor formation, indicating that they adjusted themselves to the intracranial microenvironment. We further found that the T1 cells exhibited an overexpressed level of EGFR, and the CD133 positive T1 cells showed a truncation mutation in the exons 2-7 of the EGFR (EGFRvIII) gene. These results suggest that continuous expansion of neural stem cells in culture may lead to malignant spontaneous transformation. This phenomenon may be functionally related to EGFR by EGFRvIII gene mutation.