Persephin (PSP) is a neurotrophic factor of the GDNF family that has been found to promote the survival of multiple populations of neurons. In the present study we have examined: (1) the mechanism of action and the function of PSP on nigrostriatal dopamine neurons and (2) the therapeutic potential of PSP, delivered by neural stem cells (NSCs) in a model of Parkinson's disease. Interestingly we found that the prenatal ventral mesencephalon and the newborn striatum express high levels of PSP mRNA. Moreover, midbrain dopamine neurons express its preferred receptor GFRalpha4, allowing a cis type of action of PSP on dopamine neurons. Primary culture studies showed that PSP is as potent and efficacious as GDNF at promoting both survival and neuritogenesis of midbrain dopamine neurons. To study the function and therapeutic potential of PSP in vivo we engineered NSCs to overexpress PSP. PSP-c17.2 cells were found to stably express PSP mRNA and protein for at least 3 months in vivo, to disperse within the striatum, and to give rise to neurons, astrocytes, and a large proportion of oligodendrocytes that integrated within white matter tracts in the striatum. Moreover, PSP-c17.2 cells enhanced dopamine-dependent behavioral parameters in unlesioned mice and prevented the loss of dopamine neurons and the behavioral impairment of mice receiving intrastriatal 6-OHDA injections. Thus, our findings are consistent with a direct action of PSP on developing and adult midbrain dopamine neurons and suggest that the delivery of PSP by NSCs may constitute a very useful strategy in the treatment of Parkinson's disease.