Stem cells in human urine have gained attention in recent years; however, urine-derived stem cells (USCs) are far from being well elucidated. In this study, we compared the biological characteristics of USCs with adipose-derived stem cells (ASCs) and investigated whether USCs could serve as a potential cell source for neural tissue engineering. USCs were isolated from voided urine with a modified culture medium. Through a series of experiments, we examined the growth rate, surface antigens, and differentiation potential of USCs, and compared them with ASCs. USCs showed robust proliferation ability. After serial propagation, USCs retained normal karyotypes. Cell surface antigen expression of USCs was similar to ASCs. With lineage-specific induction factors, USCs could differentiate toward the osteogenic, chondrogenic, adipogenic, and neurogenic lineages. To assess the ability of USCs to survive, differentiate, and migrate, they were seeded onto hydrogel scaffold and transplanted into rat brain. The results showed that USCs were able to survive in the lesion site, migrate to other areas, and express proteins that were associated with neural phenotypes. The results of our study demonstrate that USCs possess similar biological characteristics with ASCs and have multilineage differentiation potential. Moreover USCs can differentiate to neuron-like cells in rat brain. The present study shows that USCs are a promising cell source for tissue engineering and regenerative medicine.