A neural colony forming cell (NCFC) assay is described. The assay allows one to distinguish neural stem cells from neural progenitor cells. In one embodiment, the present invention provides a method for identifying neural stem cells or neural progenitor cells comprising: (a) suspending neural cells in a semi-solid medium which supports the growth of neural cells; (b) plating the cells in the semi-solid medium at a density that allows for the production of colonies; (c) culturing the plated cells until size differences can be discerned between the colonies; and (d) estimating colony size wherein the larger colonies are likely produced by neural stem cells and wherein the small colonies are likely produced by neural progenitor cells In alternate embodiments, NSC can be distinguished from neural progenitor cells by determining the morphology or antigen expression of the colonies.