Serotonergic (5-HT) neurons of the reticular formation play a key role in the modulation of behavior, and their dysfunction is associated with severe neurological and psychiatric disorders, such as depression and schizophrenia. However, the molecular mechanisms underlying the differentiation of the progenitor cells and the specification of the 5-HT phenotype are not fully understood. A primary neurosphere cell-culture system from mouse ventral rostral hindbrain at embryonic day 12 was therefore established. The generated primary neurospheres comprised progenitor cells and fully differentiated neurons. Bromodeoxyuridine incorporation experiments in combination with immunocytochemistry for neural markers revealed the proliferation capacity of the neural multipotent hindbrain progenitors within neurospheres and their ability to differentiate toward the neuronal lineage and serotonergic phenotype. Gene expression analysis by reverse transcription with the polymerase chain reaction showed that the neurospheres were regionally specified, as reflected by the expression of the transcription factors Gata2 and Pet1. Treatment of dissociated primary neurospheres with exogenous Shh significantly increased the number of 5-HT-immunopositive cells compared with controls, whereas neutralization of endogenous Shh significantly decreased the number of 5-HT neurons. Thus, the primary neurosphere culture system presented here allows the expansion of hindbrain progenitor cells and the experimental control of their differentiation toward the serotonergic phenotype. This culture system is therefore a useful model for in vitro studies dealing with the development of 5-HT neurons.