The efficient and large-scale generation of neural progenitor cells for neural grafting in the treatment of neurological diseases has been a challenge. Here we describe the isolation and successful propagation of neural progenitor cells from adult rat bone marrow. Unfractionated bone marrow cultured in vitro with epidermal growth factor and basic fibroblast growth factor gave rise to cellular spheres which differentiated into neurons and glia. The cellular spheres expressed nestin, a neural stem cell marker as well as CD90, a marker of hematopoietic stem cells. This methodology addresses the ethical and tissue rejection problems associated with fetal neural stem cells and would circumvent the difficulty associated with generating neural progenitors from the adult brain. We demonstrate that bone marrow may offer a renewable autologous extracranial source of neural progenitor cells.