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Cell-based therapy is likely to become a clinically useful tool to treat severe neurological disease. Disease states such as intractable temporal lobe epilepsy will be candidates for this type of therapeutic approach. Embryonic stem cells are pluripotent, and are considered a viable source for cell replacement strategies. Embryonic stem cells can be genetically manipulated to express reporter molecules, and they can be forced into neural differentiation by controlling the expression of key transcription factors. One strategy for the treatment of temporal lobe epilepsy is to transplant enriched populations of transplantable GABAergic neurons into the damaged, epileptogenic, hippocampus. The goal would be to suppress seizures, and to replace and repair damaged circuits. We genetically engineered an embryonic stem cell -derived neurogenic, fusionogenic cell line with GAD65 and transplanted them into an animal model of temporal lobe epilepsy. We found some evidence of seizure suppression, and also evidence of widespread dispersion from the transplantation site. The pattern of staining of embryonic stem cell reporter molecule that was detected, suggested a pathotropism, and selective involvement of reportedly fusionogenic cell populations within the host. We feel that the evidence suggests that embryonic stem cell-derived neural cells might have a significant capacity to fuse with host neurons, which can cloud the interpretation of cellular replacement and circuit repair. This study, and other investigations that have reported stem cell fusion events in the transplanted host, reveal embryonic stem cell capacities that may not be fully appreciated. More research is needed to fully reveal the potential of cellular therapies using stem cells.