Current evidence in stem cell biology indicates that mesenchymal stem cells (MSCs) can differentiate into mesodermal cells as well as transdifferentiate into cell types of other germ layer lineages. Further investigation of such phenotypic plasticity will provide important insights into their suitability for cell-based regenerative and reparative medicine. The purpose of this study was to evaluate the expression of neural markers after treatment of canine adipose derived mesenchymal stem cells (cAD-MSCs) with neural induction regimen. cAD-MSCs were isolated and expanded in culture in a low calcium medium supplemented with antioxidants. Differentiation was induced in serum free media with different induction agents. Panels of neural markers were used to evaluate the change in mRNA and protein expression by reverse transcription (RT)-PCR, and immunocytochemistry. RT-PCR data revealed that induced cells strongly expressed mRNAs for neural genes. In addition, immunocytochemistry showed that only induced cells with neural morphology, but not the undifferentiated MSCs, expressed neural markers. Thus, these findings reveal that canine MSCs can be induced to become neural-like cells under suitable conditions, which not only assume neural morphologies but also express neural markers at RNA and protein levels. This study demonstrates that MSCs from an abundant and accessible source have the potential to transdifferentiate into neural cells. While further functional studies are warranted, such cells hold great potential for treatment of neurodegenerative diseases.