Mesenchymal stem cells (MSCs) have been shown to contribute to the recovery of tissues through homing to injured areas, especially to hypoxic, apoptotic, or inflamed areas and releasing factors that hasten endogenous repair. In some cases genetic engineering of the MSC is desired, since they are excellent delivery vehicles. We have derived MSCs from the human embryonic stem cell (hESC) line H9 (H9-MSCs). They expressed CD105, CD90, CD73, and CD146, and lacked expression of CD45, CD34, CD14, CD31, and HLA-DR, the hESC pluripotency markers SSEA-4 and Tra-1-81, and the hESC early differentiation marker SSEA-1. Marrow-derived MSCs showed a similar phenotype. H9-MSCs did not form teratoma in our initial studies, whereas the parent H9 line did so robustly. H9-MSCs differentiated into bone, cartilage, and adipocytes in vitro, and displayed increased migration under hypoxic conditions. Finally, using a hindlimb ischemia model, H9-MSCs were shown to home to the hypoxic muscle, but not the contralateral limb, by 48 h after IV injection. In summary, we have defined methods for differentiation of hESCs into MSCs and have defined their characteristics and in vivo migratory properties.