Embryonic stem (ES) cells provide a potentially unlimited source of specialized cells for regenerative medicine. The ease of inducing stable genetic modifications in ES cells allows for in vitro manipulations to enhance differentiation into specific cell types and to optimize in vivo function of differentiated progeny in animal models of disease. We have generated mouse ES cells that constitutively express Bcl-XL, an antiapoptotic protein of Bcl-2 family. In vitro differentiation of Bcl-XL overexpressing ES (Bcl-ES) cells resulted in higher expression of genes related to midbrain dopamine (DA) neuron development and increased the number of ES-derived neurons expressing midbrain DA markers compared with differentiation of wild-type ES cells. Moreover, DA neurons derived from Bcl-ES cells were less susceptible to 1-methyl-4-phenylpyridium, a neurotoxin for DA neurons. On transplantation into parkinsonian rats, the Bcl-ES-derived DA neurons exhibited more extensive fiber outgrowth and led to a more pronounced reversal of behavioral symptoms than wild-type ES-derived DA neurons. These data suggest a role for Bcl-XL during in vitro midbrain DA neuron differentiation and provide an improved system for cell transplantation in a preclinical animal model of Parkinson's disease.