Information concerning the development and differentiation of human embryonic stem (hES) cells in vivo is limited. The present study has focused on the in vivo outcome and differentiation of the hESC line HS181, after injection into SCID/beige mice. hES cell-derived teratomas were explored using histological evaluation and by the identification of markers for differentiated cells and tissues. The analyses identified predominant differentiation along a neuronal lineage, the formation of bone/cartilage and epithelia. Fluorescent in situ hybridization (FISH) analysis with a human-specific probe showed the teratomas to be mainly of human origin, with the most organized areas being exclusively human. Importantly, the study revealed interactions between mouse and human tissues, most notably in the formation of vessels. Both mouse and human cells contributed to specific microstructures in which mouse cells could be observed to take on the appropriate histiotypic appearance. Hence, HS181 cells were able to develop into defined mature tissues, supporting the relevant use of this hES cells model for studies of early human development, given the use of appropriate controls for host contribution. Although extensive mitotic activity implicated progenitor cell activity, no detectable multipotent or malignant areas were observed during the observation period. Persisting undifferentiated hESC were not detected.