1. A method of inducing neural differentiation of embryonic stem (ES) cells comprising: (a) culturing isolated, undifferentiated, human ES cells in the presence of serum free medium supplemented with growth factors which include epidermal growth factor (EGF) and basic fibroblast growth factor (bFGF) to produce neurospheres containing neural progenitor cells, wherein said neurospheres do not express alphafetoprotein; and (b) culturing said neurospheres under conditions that induce neural differentiation, thereby inducing neural differentiation of the ES cells.