Pluripotency and the potential for continuous self-renewal make embryonic stem (ES) cells an attractive donor source for neuronal cell replacement. Despite recent encouraging results in this field, little is known about the functional integration of transplanted ES cell-derived neurons on the single-cell level. To address this issue, ES cell-derived neural precursors exhibiting neuron-specific enhanced green fluorescent protein (EGFP) expression were introduced into the developing brain. Donor cells implanted into the cerebral ventricles of embryonic rats migrated as single cells into a variety of brain regions, where they acquired complex morphologies and adopted excitatory and inhibitory neurotransmitter phenotypes. Synaptic integration was suggested by the expression of PSD-95 (postsynaptic density-95) on donor cell dendrites, which in turn were approached by multiple synaptophysin-positive host axon terminals. Ultrastructural and electrophysiological data confirmed the formation of synapses between host and donor cells. Ten to 21 d after birth, all EGFP-positive donor cells examined displayed active membrane properties and received glutamatergic and GABAergic synaptic input from host neurons. These data demonstrate that, at the single-cell level, grafted ES cell-derived neurons undergo morphological and functional integration into the host brain circuitry. Antibodies to the region-specific transcription factors Bf1, Dlx, En1, and Pax6 were used to explore whether functional donor cell integration depends on the acquisition of a regional phenotype. Our data show that incorporated neurons frequently exhibit a lacking or ectopic expression of these transcription factors. Thus, the lack of an appropriate regional “code” does not preclude morphological and synaptic integration of ES cell-derived neurons.