The etiology of sporadic Alzheimer disease (AD) is largely unknown, although evidence implicates the pathological hallmark molecules amyloid beta (Aβ) and phosphorylated Tau. Work in animal models suggests that altered axonal transport caused by Kinesin-1 dysfunction perturbs levels of both Aβ and phosphorylated Tau in neural tissues, but the relevance of Kinesin-1 dependent functions to the human disease is unknown. To begin to address this issue, we generated human embryonic stem cells (hESC) expressing reduced levels of the kinesin light chain 1 (KLC1) Kinesin-1 subunit to use as a source of human neural cultures. Despite reduction of KLC1, undifferentiated hESC exhibited apparently normal colony morphology and pluripotency marker expression. Differentiated neural cultures derived from KLC1-suppressed hESC contained neural rosettes but further differentiation revealed obvious morphological changes along with reduced levels of microtubule-associated neural proteins, including Tau and less secreted Aβ, supporting the previously established connection between KLC1, Tau and Aβ. Intriguingly, KLC1-suppressed neural precursors (NPs), isolated using a cell surface marker signature known to identify cells that give rise to neurons and glia, unlike control cells, failed to proliferate. We suggest that KLC1 is required for normal human neural differentiation, ensuring proper metabolism of AD-associated molecules APP and Tau and for proliferation of NPs. Because impaired APP metabolism is linked to AD, this human cell culture model system will not only be a useful tool for understanding the role of KLC1 in regulating the production, transport and turnover of APP and Tau in neurons, but also in defining the essential function(s) of KLC1 in NPs and their progeny. This knowledge should have important implications for human neurodevelopmental and neurodegenerative diseases.