Transplantation of neural stem/progenitor cells has been proposed as a novel approach for the replacement and repair of damaged CNS tissues. We have evaluated the influence of the host cellular microenvironment upon the survival, differentiation, and integration of neural progenitor cells transplanted into the CNS. Using this approach, we have investigated the fate of neural progenitor cells in vivo following transplantation into the developing mammalian eye. Murine brain progenitor cells (mBPCs) isolated from neonatal mice expressing the green fluorescent protein (GFP) transgene were transplanted into the eyes of Brazilian opossums (Monodelphis domestica). Monodelphis pups are born in an extremely immature, fetal-like state. The eyes of neonatal pups provide a fetal-like environment in which to study cellular interactions between host tissues and transplanted neural progenitor cells. mBPCs were transplanted by intraocular injection in hosts ranging in age from 5 days postnatal to adult. The transplanted cells were easily identified because of their GFP fluorescence. Extensive survival, differentiation, and morphological integration of mBPCs within the host tissue was observed. We found that the younger retinas provided a more supportive environment for the morphological integration of the transplanted mBPCs. Cells with morphologies characteristic of specific retinal cell types were observed. Moreover, some transplanted mBPCs were labeled with antibodies characteristic of specific neural/retinal phenotypes. These results suggest that the host environment strongly influences progenitor cell differentiation and that transplantation of neural progenitor cells may be a useful approach aimed at treating degeneration and pathology of the CNS.