The use of small molecules to 'chemically direct' differentiation represents a powerful approach to promote specification of embryonic stem cells (ESCs) towards particular functional cell types for use in regenerative medicine and pharmaceutical applications. Here, we demonstrate a novel route for chemically directed differentiation of human ESCs (hESCs) into definitive endoderm (DE) exploiting a selective small-molecule inhibitor of glycogen synthase kinase 3 (GSK-3). This GSK-3 inhibitor, termed 1m, when used as the only supplement to a chemically defined feeder-free culture system, effectively promoted differentiation of ESC lines towards primitive streak (PS), mesoderm and DE. This contrasts with the role of GSK-3 in murine ESCs, where GSK-3 inhibition promotes pluripotency. Interestingly, 1m-mediated induction of differentiation involved transient NODAL expression and Nodal signalling. Prolonged treatment of hESCs with 1m resulted in the generation of a population of cells displaying hepatoblast characteristics, that is expressing α-fetoprotein and HNF4α. Furthermore, 1m-induced DE had the capacity to mature and generate hepatocyte-like cells capable of producing albumin. These findings describe, for the first time, the utility of GSK-3 inhibition, in a chemically directed approach, to a method of DE generation that is robust, potentially scalable and applicable to different hESC lines.