Finally, because the hippocampal DG niche can provide the necessary cues to facilitate differentiation and integration of granule neurons into the existing neural circuitry throughout adulthood, we took advantage of this system to transplant hESC-derived hippocampal NPCs into the DG and to characterize their development in the endogenous environment. Remarkably, hippocampal NPCs grafted to the SGZ took on the polarized morphology of immature neurons as early as 2 weeks posttransplantation and continued to develop in vivo, as evidenced by increased soma size and dendritic arborization oriented toward the entorhinal inputs at 6 weeks posttransplantation. In addition, the grafted cells exhibited spontaneous postsynaptic currents and produced EPSCs in response to stimulation of the perforant path, demonstrating integration into the hippocampal neural circuitry. In vivo grafting into the hippocampus DG could provide a more complex and comprehensive set of environmental cues for generating and assessing the development of hippocampal granule neurons and may allow for detection of more subtle morphometric differences between diseased and nondiseased neurons that would not be apparent in the in vitro setting.