The present invention provides methods for inducing differentiation of an embryonic stem cell into a motor neuron using a motoneuronotrophic factor (MNTF) or its peptide analogs. The present invention further provides a method for isolating a population of stem cell derived motor neurons and a population of cells comprising the differentiated neural cells. Additionally, the present invention is directed to a method of enhancing the survival of the differentiated neural cells in long term cell cultures. Finally, the present invention provides compositions containing MNTF or its peptide analogs for therapeutic use in conjunction with stem cells.