We examined the myelin repair potential of transplanted neural precursor cells derived from the adult human brain from tissue removed during surgery. Sections of removed brain indicated that nestin-positive cells were found predominantly in the subventricular zone around the anterior horns of the lateral ventricle and in the dentate nucleus. Neurospheres were established and the nestin-positive cells were clonally expanded in EGF and bFGF. Upon mitogen withdrawal in vitro, the cells differentiated into neuron- and glia-like cells as distinguished by antigenic profiles; the majority of cells in culture showed neuronal and astrocytic properties with a small number of cells showing properties of oligodendrocytes and Schwann cells. When transplanted into the demyelinated adult rat spinal cord immediately upon mitogen withdrawal, the cells elicited extensive remyelination with a peripheral myelin pattern similar to Schwann cell myelination characterized by large cytoplasmic and nuclear regions, a basement membrane, and P0 immunoreactivity. The remyelinated axons conducted impulses at near normal conduction velocities. This suggests that a common neural progenitor cell for CNS and PNS previously described for embryonic neuroepithelial cells may be present in the adult human brain and that transplantation of these cells into the demyelinated spinal cord results in functional remyelination.