Background: In the differentiation of mouse embryonic stem (ES) cells into neurons using the 5-stage method, cells in stage 4 are in general used as neural progenitors (NPs) because of their ability to give rise to neurons. The choice of stage 4 raises several questions about neural progenitors such as the type of cell types that are specifically considered to be neural progenitors, the exact time when these progenitors become capable of neurogenesis and whether neurogenesis is an independent and autonomous process or the result of an interaction between NP cells and the surrounding cells. Methodology/Principal Findings: In this study, we found that the confluent monolayer cells and neural sphere like cell clusters both appeared in the culture of the first 14 days and the subsequent 6 weeks. However, only the sphere cells are neural progenitors that give rise to neurons and astrocytes. The NP cells require 14 days to mature into neural lineages fully capable of differentiation. We also found that although the confluent monolayer cells do not undergo neurogenesis, they play a crucial role in the growth, differentiation, and apoptosis of the sphere cells, during the first 14 days and long term culture, by secreted factors and direct cell to cell contact. Conclusions/Significance: The sphere cells in stage 4 are more committed to developing into neural progenitors than monolayer cells. Interaction between the monolayer cells and sphere cells is important in the development of stage 4 cell characteristics.