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The process of bringing a new pharmacologically active drug to market is laborious, time consuming, and costly. From drug discovery to safety assessment, new methods are constantly sought to develop faster and more efficient procedures to eliminate drugs from further investigation because of their limited effectiveness or high toxicity. Because in vitro cell assays are an important arm of this discovery process, it is therefore somewhat unsurprising that there is an emerging contribution of embryonic stem (ES) cell technology to this area. This technology utilizes the in vitro differentiation of ES cells into somatic cell target populations that, when coupled to the use of "lineage selection" protocols, allows for the production of infinite numbers of pure populations of the desired cells for both bioactivity and toxicological screens. Unlike the use of transformed cell lines, ES-derived cells remain karyotypically normal and therefore better reflect the potential responses of cells in vivo, and when selected are more homogeneous than those obtained using primary cultures. In this chapter we discuss the use of ES cell-derived somatic cells in pharmacological screens, with particular emphasis on neural cells, and describe the methods and protocols associated with the development of ES cell-derived neural cell assays. [ABSTRACT FROM AUTHOR]