Reprogramming of somatic cells into pluripotency stem cell state has opened new opportunities in cell replacement therapy and disease modeling in a number of neurological disorders. It still remains unknown, however, to what degree the grafted human-induced pluripotent stem cells (hiPSCs) differentiate into a functional neuronal phenotype and if they integrate into the host circuitry. Here, we present a detailed characterization of the functional properties and synaptic integration of hiPSC-derived neurons grafted in an in vitro model of hyperexcitable epileptic tissue, namely organotypic hippocampal slice cultures (OHSCs), and in adult rats in vivo. The hiPSCs were first differentiated into long-term self-renewing neuroepithelial stem (lt-NES) cells, which are known to form primarily GABAergic neurons. When differentiated in OHSCs for 6 weeks, lt-NES cell-derived neurons displayed neuronal properties such as tetrodotoxin-sensitive sodium currents and action potentials (APs), as well as both spontaneous and evoked postsynaptic currents, indicating functional afferent synaptic inputs. The grafted cells had a distinct electrophysiological profile compared to host cells in the OHSCs with higher input resistance, lower resting membrane potential, and APs with lower amplitude and longer duration. To investigate the origin of synaptic afferents to the grafted lt-NES cell-derived neurons, the host neurons were transduced with Channelrhodopsin-2 (ChR2) and optogenetically activated by blue light. Simultaneous recordings of synaptic currents in grafted lt-NES cell-derived neurons using whole-cell patch-clamp technique at 6 weeks after grafting revealed limited synaptic connections from host neurons. Longer differentiation times, up to 24 weeks after grafting in vivo, revealed more mature intrinsic properties and extensive synaptic afferents from host neurons to the lt-NES cell-derived neurons, suggesting that these cells require extended time for differentiation/maturation and synaptogenesis. However, even at this later time point, the grafted cells maintained a higher input resistance. These data indicate that grafted lt-NES cell-derived neurons receive ample afferent input from the host brain. Since the lt-NES cells used in this study show a strong propensity for GABAergic differentiation, the host-to-graft synaptic afferents may facilitate inhibitory neurotransmitter release, and normalize hyperexcitable neuronal networks in brain diseases, for example, such as epilepsy.