Regenerative transplantation of embryonic stem (ES) cell‐derived melanocytes into adult tissues, especially skin that includes hair follicles or the hair follicle itself, generally not possible, whereas that of ES cell‐derived pigmented epithelium was reported previously. We investigated the in vivo differentiation of these two pigment cell types derived from ES cells after their transfer into the iris. Melanocytes derived from ES cells efficiently integrated into the iris and expanded to fill the stromal layer of the iris, like those prepared from neonatal skin. Transplanted pigmented epithelium from either ES cells or the neonatal eye was also found to be integrated into the iris. Both types of these regenerated pigment cells showed the correct morphology. Regenerated pigment epithelium expressed its functional marker. Functional blocking of signals required for melanocyte development abolished the differentiation of transplanted melanocytes. These results indicate successful in vivo regenerative transfer of pigment cells induced from ES cells in vitro. Developmental Dynamics 237:2394–2404, 2008. © 2008 Wiley‐Liss, Inc.