The present study describes the generation and the characterization of a stable cell line of neural stem cells derived from embryonic mouse hypothalamus. These cells (AC1) grow as an adherent culture in defined serum-free medium and express typical markers of neurogenic radial glia and of hypothalamic precursors. After prolonged expansion, AC1 cells may be efficiently induced to differentiate into neurons and astroglial cells in vitro and start to express some hormonal neuropeptides, like TRH, CRH, and POMC. Based on the capabilities of AC1 cells to be stably expanded and to develop neuroendocrine lineages in vitro, these cells might represent a novel tool to elucidate the mechanisms involved in the development of the hypothalamus and in the specific differentiation of neuroendocrine neurons.