Huntington’s disease (HD) is a neurodegenerative disease, which is caused by expression of the mutant protein huntingtin, resulting in selective neuronal cell death in the striatum and cortex. Cell replacement using foetal tissues has been tried showing some success in animal models and HD patients. However, the use of aborted foetal tissues raises ethical issues, and has hindered the procedure technically, requiring researchers to look for substitute cells. Because of their pluripotency and indefinite cell division, embryonic stem (ES) cells are very good candidate. We have been trying to differentiate mouse ES cells to functional striatal GABA neurons efficiently in order to transplant cells to a mouse HD model. Three different differentiation protocols – monolayer method, embryoid body method, and five stage method – have been used and all of them yielded similar percentage of GABA neurons from ES cells, based on immunocytochemical expression of appropriate markers. GABA neurons derived from ES cells using monolayer method were tested for their function compared to primary lateral ganglionic eminence (LGE) neurons, using patch clamp techniques. Primary and ES-derived neurons had inward sodium and outward potassium currents, fired sodium channel-dependent action potentials (APs), and showed spontaneous AP firing and APs after hyperpolarisation. Both LGE neurons and ES cell-derived neurons had comparable resting membrane potentials, AP thresholds, AP amplitudes, and input resistances; but significantly different current thresholds for AP firing, AP durations, and membrane capacitances. Both types of neurons responded to L-glutamate, AMPA, and aspartate, proving the existence of functional glutamate receptors. Therefore ES-derived cells not only look like neurons but also function similarly to striatal neurons derived from the LGE.