Several recent studies have demonstrated that stem cell differentiation can be generated by derivatives of retinoic acid. In this study we chose retinoic acid (RA) for inducing neural differentiation of rat muscle-derived stem cells (rMDSCs). rMDSCs were pre-induced with 10 ng/ml basic fibroblast growth factor (bFGF) and then treated with 2 μM RA. After stimulation, RA induced rMDSCs to have a neural-like morphology after 1-7 days of in vitro differentiation. In the results of immunocytochemistry, rMDSC treated with RA showed abundant positive cells against the neuronal markers neuronal-specific enolase (NSE) and tubulin-βIII (Tuj1). Also, 2',3'-cyclic nucleotide 3'-phosphodiesterase (CNPase)-positive cells were observed, indicating oligodendrocyte lineage cells. However, positive cells against glial fibrillary acidic protein (GFAP), marker of astrocytes, were not detected. The mRNA profile of these cells included higher expression of NSE compared with those of non-treated cells in real-time PCR. From the data in this work, we suggest that rMDSCs can trans-differentiate into a neural-like phenotype under the RA conditions.