OBJECTIVE: To investigate the neural differentiating capability of the umbilical cord tissue-derived stromal cells (UCSCs) in the attempt to find a new cell source for neural transplantation. METHODS: UCSCs from umbilical cord of human were cultured with tissue piece method, passaged by trypsin digestion. And Salvia miltiorrhiza was used to induce the cells to differentiate. Cells were identified with immunocytochemistry. RESULTS: Stromal cells that migrated from explants and primary culture were obtained. These cells could differentiate into smooth muscle cells spontaneously and expressed smooth muscle actin; they could be passaged by trypsin digestion. Salvia miltiorrhiza could induce these cells to differentiate into the neuron-like cells, which displayed typical neuron morphology, expressed nestin, beta III-tubulin and NSE at the early stage of differentiation, and were stained by anti-neurofilament 200 at the late stage of differentiation. With optimal conditions, about 90% of UCSCs expressed neuronal phenotypes, lower than 1% of the differentiated cells expressed GFAP, and no myelin basic protein expression was detected in the differentiated cells, indicating the absence of oligodendrocyte differentiation from stromal cells. CONCLUSION: The data supported the hypothesis that umbilical cord contains the stem cells with the ability of differentiating into neurons, which may provide an alternative stem cell source for CNS cell transplantation.