The rat neural cell line RN33B has a remarkable ability to undergo region-specific neuronal differentiation after transplantation into the CNS. To further study its neurogenic properties in vivo, we used a recombinant lentiviral vector to genetically label the cells with the Green Fluorescent Protein (GFP) gene before implantation into the striatum/cortex, hippocampus, or mesencephalon of newborn rats. Three weeks after implantation, about 1-2% of the GFP-expressing cells had developed morphologies typical of neurons, astrocytes, or oligodendrocytes, the rest remained as either immature or undifferentiated nestin-positive cells. At 15-17 weeks postgrafting, the immature cells had disappeared in most graft recipients and only cells with neuronal or glial morphologies remained in similar numbers as at 3 weeks. The GFP distributed throughout the expressing cells, revealing fine morphological details, including dendrites with spines and extensive axonal projections. In all forebrain regions, the grafted cells differentiated into neurons with morphologies characteristic for each site, including large numbers of pyramidal-like cells in the cortex and the hippocampus, giving rise to dense projections to normal cortical target regions and to the contralateral hippocampus, respectively. In lower numbers, it was also possible to identify GFP-positive granulelike cells in the hippocampus, as well as densely spiny neurons in the striatum. In the mesencephalon by contrast, cells with astrocytic features predominated. The ability of the grafted RN33B cells to undergo region-specific differentiation into highly specialized types of forebrain projection neurons and establish connections with appropriate targets suggests that cues present in the microenvironment of the neonatal rat brain can effectively guide the development of immature progenitors, also in the absence of ongoing neurogenesis.