Renal cells are used in basic research, disease models, tissue engineering, drug screening, and in vitro toxicology. In order to provide a reliable source of human renal cells, we developed a protocol for the differentiation of human embryonic stem cells into renal epithelial cells. The differentiated stem cells expressed markers characteristic of renal proximal tubular cells and their precursors, whereas markers of other renal cell types were not expressed or expressed at low levels. Marker expression patterns of these differentiated stem cells and in vitro cultivated primary human renal proximal tubular cells were comparable. The differentiated stem cells showed morphological and functional characteristics of renal proximal tubular cells, and generated tubular structures in vitro and in vivo. In addition, the differentiated stem cells contributed in organ cultures for the formation of simple epithelia in the kidney cortex. Bioreactor experiments showed that these cells retained their functional characteristics under conditions as applied in bioartificial kidneys. Thus, our results show that human embryonic stem cells can differentiate into renal proximal tubular-like cells. Our approach would provide a source for human renal proximal tubular cells that are not affected by problems associated with immortalized cell lines or primary cells.