Neural precursors have been derived from human embryonic stem cells (hESC) using the bone morphogenetic protein antagonist noggin. These neural precursors can be further differentiated to produce neural cells that express central nervous system (CNS) markers. We have recently shown that naive hESC can be directed to differentiate into peripheral sensory (PS) neuron-like cells and putative neural crest precursors by co-culturing with PA6 stromal cells. In the present study, we examine whether hESC-derived neural precursors (NPC) can differentiate into the peripheral nervous system, as well as CNS cells. As little as 1 week after co-culture with PA6 cells, cells with the molecular characteristics of PS neurons and neural crest are observed in the cultures. With increased time in culture, more PS-like neurons appear, in parallel with a reduction in the neural crest-like cells. These results provide the first evidence that neural precursors derived from hESC have the potential to develop into PS neurons-like as well as CNS-like neuronal cells. About 10% of the cells in NPC-PA6 co-cultures express PS neuron markers after 3 weeks, compared with <1% of hESC cultured on PA6. This enrichment for peripheral neurons makes this an attractive system for generation of peripheral neurons for pathophysiology study and drug development for diseases of the peripheral nervous system such as Familial Dysautonomia and varicella virus infection.