Multipotent precursors similar to stem cells of the embryonic neural crest (NC) have been identified in several postnatal tissues, and are potentially useful for research and therapeutic purposes. However, their neurogenic potential, including their ability to produce electrophysiologically active neurons, is largely unexplored. We investigated this issue with regard to skin-derived precursors (SKPs), multipotent NC-related precursors isolated from the dermis of skin. SKP cultures follow an appropriate pattern and time-course of neuronal differentiation, with proliferating nestin-expressing SKPs generating post-mitotic neuronal cells that co-express pan-neuronal and peripheral autonomic lineage markers. These SKP-derived neuron-like cells survive and maintain their peripheral phenotype for at least 5 weeks when transplanted into the CNS environment of normal or kainate-injured hippocampal slices. Undifferentiated SKPs retain key neural precursor properties after multi-passage expansion, including growth factor dependence, nestin expression, neurogenic potential, and responsiveness to embryonic neural crest fate determinants. Despite undergoing an apparently appropriate neurogenic process, however, SKP-derived neuron-like cells possess an immature electrophysiological profile. These findings indicate that SKPs retain latent neurogenic properties after residing in a non-neural tissue, but that additional measures will be necessary to promote their differentiation into electrophysiologically active neurons.