The process of neurogenesis and formation of neural stem cells is reported in human neurospheres (NS) and embryoid bodies (EB) derived from human embryonic stem cells, in vitro, and compared with neural tissue formed in human ectopic embryos in week 4 (stage 9), developed in vivo. This morphological study was done using digital imaging by light microscopy and routine transmission electron microscopy. Both NS and EB form neural rosettes from the surface epithelium much like the process of neural tube formation from ectoderm in the embryo. The rosette is the developmental signature of neuroprogenitors in cultures of differentiating embryonic stem cells and is a radial arrangement of columnar cells that express many of the proteins expressed in neuroepithelial cells in the neural tube. The NS produce all of the major classes of progeny of the neural tube, some of which have been documented here. Specific neural markers expressed in the NS and the clinical implications of this study in cell therapy are also discussed.