Cell based therapies for Parkinson's disease (PD) using neural stem cells to replace the lost dopamine neurons is currently an intense area of research. In this study we have evaluated the restorative potential of ectopic dopaminergic (DA) neurons derived from the rostral hindbrain (RH) of En1+/Otx2lacZ transgenic mice. The genetic modification of the DA progenitor domain in the En1+/Otx2lacZ mice is a gain of function resulting in the enlargement of the area containing DA neurons, as well as an increase in their absolute number in the midbrain/hindbrain region. Amphetamine-induced rotation performed after cell transplantation into the unilaterally 6-hydroxydopamine lesioned rat striatum revealed that animals with transgenic RH-derived DA grafts exhibited functional recovery similar to transgenic and wild-type ventral mesencephalon (VM) derived DA grafts. Morphological analyses revealed equivalent numbers of surviving DA neurons from both homotopic VM- and ectopic RH-derived grafts from transgenic donors with low numbers of surviving serotonergic (5-HT) neurons. Conversely, grafts derived from wild-type donors contained predominantly surviving DA neurons or 5-HT neurons when they were prepared from the VM or RH, respectively. The study demonstrates the pattern of survival and functional potential of ectopic DA neurons derived from the RH of En1+/Otx2lacZ transgenic mice and that cell transplantation is an important neurobiological tool to characterize newly generated DA neural stem cells in vivo.