Current advances in stem cell biology have brought much hope for therapy of neuro-degenerative diseases. However, neural stem cells (NSCs) are rare adult stem cells, and the use of non-NSCs requires efficient and high-yielding lineage-specific differentiation prior to transplantation for efficacy. We report on the efficient differentiation of placental-derived multipotent cells (PDMCs) into a neural phenotype with use of Y-27632, a clinically compliant small molecular inhibitor of Rho kinase (ROCK) which is a major mediator of cytoskeleton dynamics. Y-27632 does not induce differentiation of PDMC toward the mesodermal lineages of adipogenesis and osteogenesis, but rather a neural-like morphology, with rapid development of cell extensions and processes within 24?h. Compared with conventional neurogenic differentiation agents, Y-27632 induces a higher percentage of neural-like cells in PDMCs without arresting proliferation or cell cycle dynamics. Y-27632-treated PDMCs express several neural lineage genes at the RNA and protein level, including nestin, MAP2, and GFAP. The effect of the ROCK inhibitor is cell-specific to PDMCs, and is mainly mediated through the ROCK2 isoform and its downstream target, myosin II. Our data suggest that ROCK inhibition and cytoskeletal rearrangement may allow for induction of a neural phenotype in PDMCs without compromising cell survival.