Mesenchymal stem cells (MSC) have been proposed as suitable candidates for cell therapy for neurological disorderssince they exhibit good neuronal differentiation capacity. However, for better therapeutic outcomes, it is necessary to isolate MSC from a suitable tissue sourcethat posses high neuronal differentiation. In this context, we isolated MSC from extra ocular muscle (EOM) tissue and tested the in vitro neuronal differentiation potential. In the current study, EOM tissue derived MSC were characterized and compared with bone marrow derived MSC. We found that EOM derived MSC proliferated as a monolayer and showed similarities in morphology, growth properties and cell surface marker expression with bone marrow derived MSC and expressed high levels of NES, OCT4, NANOG and SOX2 in its undifferentiated state. They also expressed embryonic cell surface marker SSEA4 and their intracellular mitochondrial distribution pattern was similar to that of multipotent stem cells. Although EOM derived MSC differentiated readily into adipocytes, osteocytes and chondrocytes, they differentiated more efficiently into neuroectodermal cells. The differentiation into neuroectodermal cellswas confirmed by the expression of neuronal markers NGFR and MAP2B. Thus, EOM derived MSC might be good candidates for stem cell based therapies for treating neurodegenerative diseases.