Although embryonic stem (ES) cells are capable of unlimited proliferation and pluripotent differentiation, effective preparation of neural stem cells from ES cells are not achieved. Here, we have directly generated under the coculture with dissociated primary neurosphere cells in serum-free medium and the same effect was observed when ES cells were cultured with conditioned medium of primary neurosphere culture (CMPNC). ES-neural stem cells (NSCs) could proliferate for more than seven times and differentiate into neurons, astrocytes, and oligodendrocytes in vitro and in vivo. The responsible molecule in CMPNC was confirmed by matrix-assisted laser desorption/ionization time-of-flight mass spectrometry, which turned out to be cystatin C. Purified cystatin C in place of the CMPNC could generate ES-NSCs efficiently with self-renewal and multidifferentiation potentials. These results reveal the validity of cystatin C for generating NSCs from ES cells.