Neurons differentiated in vitro from embryonic stem cells (ESCs) have the potential to serve both as models of disease states and in drug discovery programs. In this study, we use sonic hedgehog (SHH) and fibroblast growth factor 8 (FGF-8) to enrich for forebrain and midbrain phenotypes from mouse ESCs. We then investigate, using Ca(2+) imaging and [(3)H]-GABA release studies, whether the GABAergic neurons produced exhibit distinct functional phenotypes. At day 24 of differentiation, reverse transcriptase-PCR showed the presence of both forebrain (Bf-1, Hesx1, Pgc-1 alpha, Six3) and midbrain (GATA2, GATA3) selective mRNA markers in developing forebrain-enriched cultures. All markers were present in midbrain cultures except for Bf-1 and Pgc-1 alpha. Irrespective of culture conditions all GABA immunoreactive neurons were also immunoreactive to neuropeptide Y (NPY) antibodies. Forebrain and midbrain GABAergic neurons responded to ATP (1 mM). L-glutamate (30 mu M), noradrenaline (30 mu M), acetylcholine (30 mu M) and dopamine (30 mu M), with similar elevations of intracellular Ca(2+)([Ca(2+)](i)). The presence of GABA(A) and GABA(B) antagonists, bicuculline (30 mu M) and CGP55845 (1 mu M), increased the elevation of [Ca(2+)](i) in response to dopamine (30 mu M) in midbrain, but not forebrain GABAergic neurons. All agonists, except dopamine, elicited similar [(3)H]-GABA release from forebrain and midbrain cultures. Dopamine (30 mu M) did not stimulate significant [(3)H]-GABA release in midbrain cultures, although it was effective in forebrain cultures. This study shows that differentiating neurons toward a midbrain fate restricts the expression of forebrain markers. Forebrain differentiation results in the expression of forebrain and midbrain markers. All GABA(+) neurons contain NPY, and show similar agonist-induced elevations of [Ca(2+)](i) and [(3)H]-GABA release.This study indicates that the pharmacological phenotype of these particular neurons may be independent of the addition of the patterning factors that direct neurons toward forebrain and midbrain fates. (C) 2011 Elsevier Ltd. All rights reserved.