Degeneration of medium spiny GABA neurons in the basal ganglia underlies motor dysfunction in Huntington's disease (HD), which presently lacks effective therapy. In this study, we have successfully directed human embryonic stem cells (hESCs) to enriched populations of DARPP32-expressing forebrain GABA neurons. Transplantation of these human forebrain GABA neurons and their progenitors, but not spinal GABA cells, into the striatum of quinolinic acid-lesioned mice results in generation of large populations of DARPP32(+) GABA neurons, which project to the substantia nigra as well as receiving glutamatergic and dopaminergic inputs, corresponding to correction of motor deficits. This finding raises hopes for cell therapy for HD.