Numerous studies suggest a long duration of anesthesia during the late gestation period and infancy is associated with an increased risk of neuronal damage and neurocognitive impairment. The noble gas xenon is an anesthetic that is reported to have neuroprotective effects in some circumstances at certain concentrations. Currently, the effects of xenon on the brain and its potential neuroprotective properties, and/or the effects of xenon used in combination with other anesthetics, are not clearly understood and some reported data appear contradictory. In the present study, human neural stem cells were employed as a human-relevant model to evaluate the effects of xenon when it was co-administered with propofol, a frequently used anesthetic in pediatric anesthesia, and to understand the mechanism(s). The expression of polysialic acid (PSA) neural cell adhesion molecule (NCAM) on human neural stem cell-differentiated neurons was investigated as a key target molecule. PSA is a specific marker of developing neurons. It is essential for neuronal viability and plasticity. Human neural stem cells were maintained in neural differentiation medium and directed to differentiate into neuronal and glial lineages, and were exposed to propofol (50 μM) for 16 h in the presence or absence of xenon (33%). The neural stem cell-derived neurons were characterized by labelling cells with PSA-NCAM, after 5 days of differentiation. Propofol- and/or xenon-induced neurotoxicities were determined by measuring PSA immunoreactivity. A time course study showed that neuronal cell surface PSA was clearly cleaved off from NCAM by endoneuraminidase N (Endo-N), and eliminated PSA immunostaining was not re-expressed 4, 8, or 16 h after Endo-N washout. However, in the presence of 33% xenon, intense PSA staining on neuronal cell surface and processes was evident 16 h after Endo-N washout. In addition, prolonged (16 h) propofol exposure significantly decreased the positive rate of PSA-labeled neurons. When combined with xenon, propofol’s adverse effects on neurons were attenuated. This work, conducted on the human neural stem cell-derived models, has provided evidence of the beneficiary effects of xenon on neurons and helps develop xenon-based anesthesia regimens in the pediatric population.