The LIM homeodomain transcription factor 1b (Lmx1b) is a key factor in the specification of the serotonergic neurotransmitter phenotype. Here, we explored the capacity of Lmx1b to direct differentiation of mouse embryonic stem (mES) cells into serotonergic neurons. mES cells stably expressing human Lmx1b were generated by lentiviral vector infection. Clones expressing Lmx1b at a low level showed increased neurogenesis and elevated production of neurons expressing serotonin, serotonin transporter, tryptophan hydroxylase 2, and transcription factor Pet1, the landmarks of serotonergic differentiation. To explore the role of Lmx1b in the specification of the serotonin neurotransmission phenotype further, a conditional system making use of a floxed inducible vector targeted into the ROSA26 locus and a hormone-dependent Cre recombinase was engineered. This novel strategy was tested with the reporter gene encoding human placental alkaline phosphatase, and demonstrated its capacity to drive transgene expression in nestin(+) neural progenitors (NPs) and in Tuj1(+) neurons. When it was applied to inducible expression of human Lmx1b, it resulted in elevated expression of serotonergic markers. Treatment of neural precursors with the floor plate signal Sonic hedgehog further enhanced differentiation of Lmx1b-overexpressing NPs into neurons expressing 5-HT, serotonin transporter, tryptophan hydroxylase 2, and Pet1, when compared with Lmx1b-nonexpressing progenitors. Together, our results demonstrate the capacity of Lmx1b to specify a serotonin neurotransmitter phenotype when overexpressed in mES cell-derived NPs.