Alternative models for more rapid compound safety testing are of increasing demand. With emerging techniques using human pluripotent stem cells, the possibility of generating human in vitro models has gained interest, as factors related to species differences could be potentially eliminated. When studying potential neurotoxic effects of a compound it is of crucial importance to have both neurons and glial cells. We have successfully developed a protocol for generating in vitro 3D human neural tissues, using neural progenitor cells derived from human embryonic stem cells. These 3D neural tissues can be maintained for two months and undergo progressive differentiation. We showed a gradual decreased expression of early neural lineage markers, paralleled by an increase in markers specific for mature neurons, astrocytes and oligodendrocytes. At the end of the two-month culture period the neural tissues not only displayed synapses and immature myelin sheaths around axons, but electrophysiological measurements also showed spontaneous activity. Neurotoxicity testing – comparing non-neurotoxic to known neurotoxic model compounds – showed an expected increase in the marker of astroglial reactivity after exposure to known neurotoxicants methylmercury and trimethyltin. Although further characterization and refinement of the model is required, these results indicate its potential usefulness for in vitro neurotoxicity testing.