The in vitro generation of cell-based three dimensional (3D) nerve tissue is an attractive subject to improve graft survival and integration into host tissue for neural tissue regeneration or to model biological events in stem cell differentiation. Although 3D organotypic culture strategies are well established for 3D nerve tissue formation of pluripotent stem cells to study underlying biology in nerve development, cell-based nerve tissues have not been developed using human postnatal stem cells with therapeutic potential. Here, we established a culture strategy for the generation of in vitro cell-based 3D nerve tissue from postnatal stem cells from apical papilla (SCAPs) of teeth, which originate from neural crest-derived ectomesenchyme cells. A stem cell population capable of differentiating into neural cell lineages was generated during the ex vivo expansion of SCAPs in the presence of EGF and bFGF, and SCAPs differentiated into neural cells, showing neural cell lineage-related molecular and gene expression profiles, morphological changes and electrophysical property under neural-inductive culture conditions. Moreover, we showed the first evidence that 3D cell-based nerve-like tissue with axons and myelin structures could be generated from SCAPs via 3D organotypic culture using an integrated bioprocess composed of polyethylene glycol (PEG) microwell-mediated cell spheroid formation and subsequent dynamic culture in a high aspect ratio vessel (HARV) bioreactor. In conclusion, the culture strategy in our study provides a novel approach to develop in vitro engineered nerve tissue using SCAPs and a foundation to study biological events in the neural differentiation of postnatal stem cells. Biotechnol. Bioeng. 2017;114: 903-914. (c) 2016 Wiley Periodicals, Inc.