Undifferentiated human embryonic stem cells (hESCs) are currently propagated on a relatively small scale as monolayer colonies. Culture of hESCs as floating aggregates is widely used for induction of differentiation into embryoid bodies. Here we show that hESC lines can be derived from floating inner cell masses in suspension culture conditions that do not involve feeder cells or microcarriers. This culture system supports prolonged propagation of the pluripotent stem cells as floating clusters without their differentiation into embryoid bodies. HESCs cultivated as aggregates in suspension maintain the expression of pluripotency markers and can differentiate into progeny of the three germ layers both in vitro and in vivo. We further show the controlled differentiation of hESC clusters in suspension into neural spheres. These results pave the way for large-scale expansion and controlled differentiation of hESCs in suspension, which would be valuable in basic and applied research.