The formation of stem cell–derived tumors (teratomas) is observed when engrafting undifferentiated embryonic stem (ES) cells, embryoid body–derived cells (EBCs), or mammalian embryos and is a significant obstacle to stem cell therapy. We show that in tumors formed after engraftment of EBCs into mouse brain, expression of the pluripotency marker Oct-4 colocalized with that of prostate apoptosis response-4 (PAR-4), a protein mediating ceramide-induced apoptosis during neural differentiation of ES cells. We tested the ability of the novel ceramide analogue N-oleoyl serinol (S18) to eliminate mouse and human Oct-4(+)/PAR-4(+) cells and to increase the proportion of nestin(+) neuroprogenitors in EBC-derived cell cultures and grafts. S18-treated EBCs persisted in the hippocampal area and showed neuronal lineage differentiation as indicated by the expression of β-tubulin III. However, untreated cells formed numerous teratomas that contained derivatives of endoderm, mesoderm, and ectoderm. Our results show for the first time that ceramide-induced apoptosis eliminates residual, pluripotent EBCs, prevents teratoma formation, and enriches the EBCs for cells that undergo neural differentiation after transplantation.

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