Loss of GABAergic projection neurons under excitotoxic conditions in the striatum is associated with a disturbance of motor and cognitive functions as seen, for instance, in Huntington's disease. Since current treatments cannot replace degenerated neurons, research on alternative therapeutic approaches needs to be pursued. In this context, the transplantation of genetically modified stem cells into lesioned brain areas of patients is a possible alternative. In this study, green fluorescent protein-labeled murine embryonic stem cells (ESCs) were stably transfected to overexpress the extracellular matrix molecule tenascin-R (TNR), which is expressed by striatal GABAergic neurons. TNR-overexpressing ESCs were analyzed in comparison with their parental cells regarding neural differentiation and migration in vitro, and after transplantation into the striatum of quinolinic acid-treated mice, which serve as a model for Huntington's disease. In comparison with sham-transfected control cells, TNR-overexpressing ESCs showed enhanced differentiation into neurons in vitro, reduced migration in vitro and in vivo, and increased generation of GABAergic neurons and decreased numbers of astrocytes 1 month and 2 months after transplantation, but without significant effects on locomotor functions. Interestingly, TNR-overexpressing ESCs transplanted into the striatum attracted host-derived neuroblasts from the rostral migratory stream and promoted stem cell-mediated recruitment of host-derived newborn neurons within the grafted area. Thus, we show for the first time that overexpression of an extracellular matrix molecule by in vitro predifferentiated ESCs exerts beneficial effects on tissue regeneration in a mouse model of neurodegenerative disease. Disclosure of potential conflicts of interest is found at the end of this article.