This thesis demonstrated successful generation of functional forebrain neurons from human embryonic stem cells. The results suggest that the stem cell-derived neurons provide an excellent model for studying synapse health and neuroinflammatory responses against toxic peptides produced in Alzheimer's disease (AD). The model will have applications in drug discovery and modelling of the effects of neuroprotective agents, and will serve as a platform study of the effects of genetic influences on patient susceptibility to AD.