Neural progenitor cells reside in many regions of the adult brain. However, their capacity to generate new neurons relies on stem cell niches, consisting of stem cells, niche support cells, and basal lamina, which maintain stem cells and direct their differentiation and migration into tissue structures. Neurospheres are thought to expose neural progenitor cells to an environment reminiscent of the stem cell niche. We show that embryonic day 14.5 ventral mesencephalon neurospheres grafted into the midbrain of 6-hydroxydopamine lesioned mice express markers of mesenchymal cells, such as CD29 and CD44, and enclose a core of host-derived proliferating cells that express nestin, polysialic acid-neural cell adhesion molecule, βIII-tubulin, and neuron-specific nuclear protein. Laminin was expressed between the grafted cells and the core of proliferating host-derived cells. Further, infusion of the anti-mitotic agent β-d-arabinofuroside into the midbrain resulted in the loss of host-derived core cells that gradually returned over many days following β-d-arabinofuroside withdrawal. Together, these data suggest that a stem cell niche had been formed. Tyrosine hydroxylase (TH+) cells, ectopic to the usual midbrain locations, were present 4 weeks after grafting and increased in numbers up to 12 weeks after grafting, resulting in significantly more TH cells than control animals. These data provide evidence that cells within the midbrain are capable of acquiring a TH phenotype when exposed to the appropriate environment. Whether these cells are a result of neurogenesis or phenotypic shift remains unanswered.