Embryonal carcinoma cells are pluripotent stem cells derived from germ cell tumors and can be used to study cell differentiation in vitro. This report describes an approach designed to isolate pluripotent stem cells from primary/parent stock cultures of explanted tumor material. Cells expressing the pluripotent stem cell marker, SSEA-3, were isolated from heterogeneous stock cultures of the human teratoma line, TERA2, using immunomagnetic isolation. Single cell selection was performed on isolated SSEA-3+ cells and clonal lines were established. Each line was ultimately grown as a homogeneous monolayer, independent of feeder cells and expressed high levels of markers for pluripotent stem cells. In response to retinoic acid, clone TERA2.cl.SP-12 cells displayed enhanced neural differentiation compared to previously isolated TERA2 sublines and formed both neurons and glia. Deriving human pluripotent stem cell lines that differentiate into a range of cell types will provide useful tools to understand the molecular mechanisms controlling cell differentiation in a manner pertinent to human embryonic development.