Human embryonic stem cells (hESCs) are a promising source for cell therapy in degenerative diseases. A key step in establishing the medical potential of hESCs is the development of techniques for the conversion of hESCs into tissue-restricted precursors suitable for transplantation. We recently described the derivation of multipotent mesenchymal precursors from hESCs. Nevertheless, our previous study was limited by the requirement for mouse feeders and the lack of in vivo data. Here we report a stroma-free induction system for deriving mesenchymal precursors. Selective culture conditions and fluorescence-activated cell sorting (FACS)-mediated purification yielded multipotent mesenchymal precursors and skeletal myoblasts. Skeletal muscle cells undergo in vitro maturation resulting in myotube formation and spontaneous twitching. We found that hESC-derived skeletal myoblasts were viable after transplantation into the tibialis anterior muscle of SCID/Beige mice, as assessed by bioluminescence imaging. Lack of teratoma formation and evidence of long-term myoblast engraftment suggests considerable potential for future therapeutic applications.