Can we make nerve cells from skin cells? The answer seems to be yes. Furthermore, it seems to be really easy to do.
Marius Wernig at the Institute for Stem Cell Biology and Regenerative Medicine, Department of Pathology at Stanford University School of Medicine had published a remarkable paper. They started from a pool of nineteen candidate genes, but they identified a combination of only three factors, Ascl1, Brn2 (also called Pou3f2) and Myt1l, that rapidly and efficiently convert mouse embryonic and adult mouse fibroblasts into functional neurons in vitro. He called these cells induced neuronal (iN) cells. He further showed that they expressed multiple neuron-specific proteins, and were able to generate nerve impulses and form functional connections between other nerve cells (synapses). Because they could make iN cells from non-nerve cells, they might be able to make large quantities studies of neurons for research.
Of even greater importance is the ability to make nerve cells for regenerative medicine. While it is too early to get too excited about this, the ability to form neurons from your own skin cells to repair spinal cord injuries and other neurological disorders without killing embryos is thrilling to say the least.