They used the cells to grow what they dubbed "cerebral organoids" -- pea-sized blobs of 3D brain tissue in a Petri dish, with characteristics of early embryonic brain tissue.
The feat may reduce scientists' reliance on the mouse brain, which is a poor model for research into human diseases and treatment, the team wrote in the journal Nature.
"Development of the human brain is very different from development, for example, of the mouse brain," study coordinator Juergen Knoblich of the Austrian Academy of Sciences told a telephone press conference.
It was also hoped the method would allow researchers to "test drugs directly in a human setting and thereby avoid animal experiments and get more informed results that are more easily transferrable to human patients," said Knoblich.
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Stem cell researchers have made progress to create 3D tissue of other human organs, including the heart and liver, but the brain has remained elusive.
Knoblich's team used pluripotent stem cells, which can be prompted to develop into any kind of cell of the body, to create neural cells that "self-organised" into organoids up to four millimetres (0.15 inches) big. They survived for several months in a spinning bioreactor.
"The tissues form in layers and display an organisation similar to the developing human brain at early stages."
The neural cells were "active", according to Knoblich.
"These structures are not just peculiar lab artefacts," said Oliver Bruestle of the University of Bonn's Life and Brain Centre in a comment on the study.
"The organoids recreate early steps in the formation of the human brain's cerebral cortex, and so lend themselves to studies of brain development and neurodevelopmental disorders."
The organoids mimicking different brain regions were randomly distributed and lacked the shape and overall spatial organisation of the human brain.
As they had no circulatory system, the supply of nutrients and oxygen was restricted, meaning the organoids could grow to only a few millimetres in size.