The mucopolysaccharidoses (MPS) are lysosomal storage disorders resulting from the impaired catabolism of glycosaminoglycans (GAG). MPS type IIIA patients have dysfunctional sulfamidase enzyme leading to lysosomal storage of the GAG heparan sulfate, severe neurological symptoms including regression in learning, behavioural abnormalities, and premature death. We have engineered mouse D3 embryonic stem (ES) cells to over-express recombinant human sulfamidase. Human sulfamidase was correctly folded and secreted 2h post-labelling as determined by immunoprecipitation and SDS-PAGE analysis of transfected ES cells. Secreted human sulfamidase present in conditioned ES cell media was able to be taken up via mannose-6-phosphate-mediated endocytosis and restored sulfamidase enzyme activity in human MPS IIIA fibroblast cell lines. ES cells underwent directed differentiation to neural precursor populations and were capable of sustained human sulfamidase over-expression at all stages. Additionally, transfected and control cells were proliferative (Ki67+) and expressed several neural markers (nestin, MAP-2, and NF160) as determined by immunofluorescence. These findings suggest the possibility of ES cell-based therapy for the treatment of neurological pathology of MPS IIIA.