Human neural stem cells (NSCs) are particularly valuable for the study of neurogenesis process and have a therapeutic potential in treating neurodegenerative disorders. However, current progress in the use of human NSCs is limited due to the available NSC sources and the complicated isolation and culture techniques. In this study, we describe an efficient method to isolate and propagate human NSCs from the amniotic fluid with diagnosed neural tube defects (NTDs), specifically, anencephaly. These amniotic fluid-derived NSCs (AF-NSCs) formed neurospheres and underwent long-term expansion in vitro. In addition, these cells showed normal karyotypes and telomerase activity and expressed NSC-specific markers, including Nestin, Sox2, Musashi-1, and the ATP-binding cassette G2 (ABCG2). AF-NSCs displayed typical morphological patterns and expressed specific markers that were consistent with neurons, astrocytes, oligodendrocytes, and dopaminergic neurons after proper induction conditions. Furthermore, grafted AF-NSCs improved the physiological functions in a rat stroke model. The ability to isolate and bank human NSCs from this novel source provides a unique opportunity for translational studies of neurological disorders.