We investigated the effects of bone morphogenetic proteins (BMPs) in determining the positional identity of neurons generated in vitro from mouse embryonic stem cells (ESCs), an aspect that has been neglected thus far. Classical embryological studies in lower vertebrates indicate that BMPs inhibit the default fate of pluripotent embryonic cells, which is both neural and anterior. Moreover, mammalian ESCs generate neurons more efficiently when cultured in a minimal medium containing BMP inhibitors. In this paper, we show that mouse ESCs produce, secrete, and respond to BMPs during in vitro neural differentiation. After neuralization in a minimal medium, differentiated ESCs show a gene expression profile consistent with a midbrain identity, as evaluated by the analysis of a number of markers of anterior-posterior and dorsoventral identity. We found that BMPs endogenously produced during neural differentiation mainly act by inhibiting the expression of a telencephalic gene profile, which was revealed by the treatment with Noggin or with other BMP inhibitors. To better characterize the effect of BMPs on positional fate, we compared the global gene expression profiles of differentiated ESCs with those of embryonic forebrain, midbrain, and hindbrain. Both Noggin and retinoic acid (RA) support neuronal differentiation of ESCs, but they show different effects on their positional identity: whereas RA supports the typical gene expression profile of hindbrain neurons, Noggin induces a profile characteristic of dorsal telencephalic neurons. Our findings show that endogenously produced BMPs affect the positional identity of the neurons that ESCs spontaneously generate when differentiating in vitro in a minimal medium. The data also support the existence of an intrinsic program of neuronal differentiation with dorsal telencephalic identity. Our method of ESC neuralization allows for fast differentiation of neural cells via the same signals found during in vivo embryonic development and for the acquisition of cortical identity by the inhibition of BMP alone.