In order to determine whether the lateral ganglionic eminence (LGE) of the fetal telencephalon is the primary source of striatal precursors in striatal transplants and tissue cultures, cells derived exclusively from the LGE of fetal rat brains were transplanted into the quinolinic-acid-lesioned striatum of adult rats. After 2-3 months they produced grafts that were almost entirely AChE-positive as well as DARPP-32-, TH-, and calbindin-immunoreactive. The grafts were integrated into the host striatum so that host corticofugal fiber tracts interdigitated with graft tissues similar to the way they penetrate the gray matter of the normal striatum. Fast Blue dye injected into the ipsilateral globus pallidus of LGE grafted produced retrogradely labeled neurons within the grafts, but Fluorogold dye injected into the ipsilateral substantia nigra did not. In a separate experiment using DARPP-32-immunohistochemstry as a striatal marker, fetal (E16) and neonatal (P2) rat brains showed DARPP-32 immunoreactivity in the LGE but not in the adjacent medial ganglionic eminence (MGE). In summary, both fetal LGE cells and LGE grafts express specific striatal markers, and LGE grafts integrate into the host striatum and innervate the major striatal efferent target within the host brain. These data suggest that the LGE is the origin of cells committed to striatal phenotypes in the developing brain.