Human fetal brain is a potential source of neural stem cells (NSCs) for cell replacement therapy in neurodegenerative diseases. We explored whether NSCs isolated from cortex and striatum of human fetuses, aged 6–9 weeks post‐conception, maintain their regional identity and differentiate into specific neuron types in culture and after intrastriatal transplantation in neonatal rats. We observed no differences between cortex‐ and striatum‐derived NSCs expanded as neurospheres in proliferative capacity, growth rate, secondary sphere formation, and expression of neural markers. After 4 weeks of differentiation in vitro, cortical and striatal NSCs gave rise to similar numbers of GABAergic and VMAT2‐ and parvalbumin‐containing neurons. However, whereas cortical NSCs produced higher number of glutamatergic and tyrosine hydroxylase‐ and calretinin‐positive neurons, several‐fold more neurons expressing the striatal projection neuron marker, DARPP‐32, were observed in cultures of striatal NSCs. Human cortical and striatal NSCs survived and migrated equally well after transplantation. The two NSC types also generated similar numbers of mature NeuN‐positive neurons, which were several‐fold higher at 4 months as compared to at 1 month after grafting. At 4 months, the grafts contained cells with morphologic characteristics of neurons, astrocytes, and oligodendrocytes. Many of neurons were expressing parvalbumin. Our data show that NSCs derived from human fetal cortex and striatum exhibit region‐specific differentiation in vitro, and survive, migrate, and form mature neurons to the same extent after intrastriatal transplantation in newborn rats. © 2006 Wiley‐Liss, Inc.