Differentiation of mesenchymal stem cells (MSCs) into neuron cells has great potential in therapy of damaged nerve tissue. It has been shown that three-dimensional biomaterials have great ability to up regulate the expression of neuronal proteins. In this study, O2 plasma technology was used to enhance hydrophilicity of poly (ε-caprolactone) (PCL) toward selective differentiation of MSCs into neural cells. Random and aligned PCL nanofibers scaffolds were fabricated by electrospinning method and their physicochemical and mechanical properties were carried out by scanning electron microscope (SEM), contact angle, and tensile measurements. Contact angle studies of PCL and plasma treated PCL (p-PCL) nanofibers revealed significant change on the surface properties PCL nanofibers from the view point of hydrophilicity. Physiochemical studies revealed that p-PCL nanofibers were extremely hydrophilic compared with untreated PCL nanofibers which were highly hydrophobic and nonabsorbent to water. Differentiation of MSCs were carried out by inducing growth factors including basic fibroblast growth factor, nerve growth factor, and brain derived growth factor, NT3, 3-isobutyl-1-methylxanthine (IBMX) in Dulbecco's modified Eagle's medium/F12 media. Differentiated MSCs on nanofibrous scaffold were examined by immunofluorescence assay and was found to express the neuronal proteins; β-tubulin III and Map2, on day 15 after cell culture. The real-time polymerase chain reaction (RT-PCR) analysis showed that p-PCL nanofibrous scaffold could upregulate expression of Map-2 and downregulate expression of Nestin genes in nerve cells differentiated from MSCs. This study indicates that mesenchymal stem cell cultured on nanofibrous scaffold have potential differentiation to neuronal cells on and could apply in nerve tissue repair.