Intrastriatal grafts of fetal ventral mesencephalic tissue, rich in dopaminergic neurons, can reverse symptoms in Parkinson's disease. For development of effective cell replacement therapy, other sources of dopaminergic neurons, e.g. derived from stem cells, are needed. However, the electrophysiological properties grafted cells need to have in order to induce substantial functional recovery are poorly defined. It has not been possible to prospectively identify and record from dopaminergic neurons in fetal transplants. Here we used transgenic mice expressing green fluorescent protein under control of the rat tyrosine hydroxylase promoter for whole-cell patch-clamp recordings of endogenous and grafted dopaminergic neurons. We transplanted ventral mesencephalic tissue from E12.5 transgenic mice into striatum of neonatal rats with or without lesions of the nigrostriatal dopamine system. The transplanted cells exhibited intrinsic electrophysiological properties typical of substantia nigra dopaminergic neurons, i.e. broad action potentials, inward rectifying currents with characteristic 'sag', and spontaneous action potentials. The grafted dopaminergic neurons also received functional excitatory and inhibitory synaptic inputs from the host brain, as shown by the presence of both spontaneous and stimulation-evoked excitatory and inhibitory postsynaptic currents. Occurrence of spontaneous excitatory and inhibitory currents was lower, and of spontaneous action potentials was higher, in neurons placed in the dopamine-depleted striatum than of those in the intact striatum. Our findings define specific electrophysiological characteristics of transplanted fetal dopaminergic neurons, and we provide the first direct evidence of functional synaptic integration of these neurons into host neural circuitries.