Huntington's disease is a progressive neurodegenerative disease that affects the striatum, above all, the GABAergic striatal projection neurons. In the present study, we have explored the use of genetically modified neural stem cell lines producing nerve growth factor (NGF) or brain-derived neurotrophic factor (BDNF) as a means to protect the striatal neurons against excitotoxic damage after transplantation to the striatum, 1 week before the injection of quinolinic acid into the same area. One month after the lesion, striatal degeneration, lesion size, and loss of DARPP-32-positive projection neurons were only slightly affected by the BDNF-secreting cells, but substantially prevented when NGF-producing stem cells were used as a source of exogenous trophic factor; innervation of the target fields (pars reticulata of the substantia nigra and the globus pallidus) was preserved as well. Cholinergic striatal interneurons (choline acetyltransferase- immunoreactive) were affected by the lesion and completely rescued by the NGF-transduced cells. The astroglial and microglial reactions to the excitotoxic lesion were substantially reduced in the striata, which had received transplants of NGF-producing cells. The generalized protective effects of the NGF-producing cell grafts in this model are discussed in the context of an indirect action preventing the development of toxicity mediated by cellular elements in the host striatum in response to the excitotoxin. We conclude that continuous supply of trophic factors by means of genetically modified neural stem cells represents a highly effective procedure to counteract neuronal degeneration in the excitotoxically lesioned striatum.