The transplantation of fetal porcine neurons is a potential therapeutic strategy for the treatment of human neurodegenerative disorders. A major obstacle to xenotransplantation, however, is the immune-mediated rejection that is resistant to conventional immunosuppression. To determine whether genetically modified donor pig neurons could be used to deliver immunosuppressive proteins locally in the brain, transgenic pigs were developed that express the human T cell inhibitory molecule hCTLA4-Ig under the control of the neuron-specific enolase promoter. Expression was found in various areas of the brain of transgenic pigs, including the mesencephalon, hippocampus and cortex. Neurons from 28-day old embryos secreted hCTLA4-Ig in vitro and this resulted in a 50% reduction of the proliferative response of human T lymphocytes in xenogenic proliferation assays. Transgenic embryonic neurons also secreted hCTLA4-Ig and had developed normally in vivo several weeks after transplantation into the striatum of immunosuppressed rats that were used here to study the engraftment in the absence of immunity. In conclusion, these data show that neurons from our transgenic pigs express hCTLA4-Ig in situ and support the use of this material in future pre-clinical trials in neuron xenotransplantation.