The ability to study the characteristics of serotonin release from human serotonergic neurons is valuable both in terms of understanding disease pathology and in trying to understand how drugs that affect the serotonergic system alter neurotransmitter release. There is, however, no good in vitro system to model human serotonergic neurons. Although human embryonic stem (hES) cells offer an attractive model system, the derivation of serotonergic neurons from these cells has remained at a low efficiency. To address this problem, Nestin positive precursors from HUES7 hES cell line were first generated. These Nestin positive cells when terminally differentiated gave rise to 20% MAP-2 positive neurons. A high percentage (>40%) of these neurons could be converted to serotonergic neurons. These serotonergic neurons expressed both serotonin and the neuron-specific tryptophan hydroxylase enzyme. In addition, they expressed several of the transcription factors that have been associated with serotonergic differentiation including Mash1 and Pet1. Finally, during the process of neuronal differentiation, the serotonin content, the localization of serotonin vesicles, and their ability to release serotonin following depolarization was characterized using a live cell serotonin imaging technique based on three-photon microscopy. Thus, for the first time, we demonstrate the feasibility of characterizing the development and function of human serotonergic neurons in vitro.