AIM: To investigate whether umbilical cord human mesenchymal stem cell (UC-MSC) was able to differentiate into neural stem cell and neuron in vitro. METHODS: The umbilical cords were obtained from pregnant women with their written consent and the approval of the Clinic Ethnics Committee. UC-MSC were isolated by adherent culture in the medium contains 20% fetal bovine serum (FBS), then they were maintained in the medium contain 10% FBS and induced to neural cells in neural differentiation medium. We investigated whether UC-MSC was able to differentiate into neural stem cell and neuron in vitro by using flow cytometry, reverse transcriptase-polymerase chain reaction (RT-PCR) and immunofluorescence (IF) analyzes. RESULTS: A substantial number of UC-MSC was harvested using the tissue explants adherent method at about 2wk. Flow cytometric study revealed that these cells expressed common markers of MSCs, such as CD105 (SH2), CD73 (SH3) and CD90. After induction of differentiation of neural stem cells, the cells began to form clusters; RT-PCR and IF showed that the neuron specific enolase (NSE) and neurogenic differentiation 1-positive cells reached 87.3%±14.7% and 72.6%±11.8%, respectively. Cells showed neuronal cell differentiation after induced, including neuron-like protrusions, plump cell body, obviously and stronger refraction. RT-PCR and IF analysis showed that microtubule-associated protein 2 (MAP2) and nuclear factor-M-positive cells reached 43.1%±10.3% and 69.4%±19.5%, respectively. CONCLUSION: Human umbilical cord derived MSCs can be cultured and proliferated in vitro and differentiate into neural stem cells, which may be a valuable source for cell therapy of neurodegenerative eye diseases.