['Bioactive lipids such as lysophosphatidic acid (LPA) and sphingosine-1-phosphate (S1P) have been recently described as important regulators of pluripotency and differentiation of embryonic stem (ES) cells and neural progenitors. Due to the early lethality of LPP3, an enzyme that regulates the levels and biological activities of the aforementioned lipids, it has been difficult to assess its participation in early neural differentiation and neuritogenesis.', 'We find that Ppap2b(-/-) (Lpp3(-/-) ) ES cells differentiated in vitro into spinal neurons show a considerable reduction in the amount of neural precursors and young neurons formed. In addition, differentiated Lpp3(-/-) neurons exhibit impaired neurite outgrowth. Surprisingly, when Lpp3(-/-) ES cells were differentiated, an unexpected appearance of smooth muscle actin-positive cells was observed, an event that was partially dependent upon phosphorylated sphingosines.'] Does lack of lipid phosphate phosphatase-3 in embryonic stem cells compromise neuronal differentiation and neurite outgrowth?