Availability of human embryonic stem cells (hESCs) and its neural derivatives has opened up wide possibilities of using these cells as tools for developmental studies, drug screening and cell therapies for treating neurodegenerative diseases. However, for hESC-derived neurons to fulfill their potential they need to form functional synapses and spontaneously active neural networks. Until recently very few studies have reported hESC-derived neurons capable of forming such networks, suggesting lack of certain components in culture media to promote mature synaptogenesis. In this review we discuss the various factors that enhance functional synapse formation in primary and stem cell-derived neuronal cultures. These factors include astrocytes, astrocyte-derived factors, cell adhesion molecules and neurotrophins. We discuss the current literature on studies that have used these factors for functional differentiation of primary neural cultures, and discuss its implications for stem cell -derived neural cultures.