The pluripotent nature of human embryonic stem cells (hESCs) makes them a convenient in vitro model for studying aspects of early development, as well a common starting point for deriving numerous therapeutically relevant cells. Unlike in studies of embryonic mice or mouse ESCs, it remains unknown whether human ESC-derived endodermal progeny resembling liver, pancreas, or intestinal cells are produced from SOX17+ cells. To address this fundamental question, we used homologous recombination to target a reporter gene to the endogenous SOX17 locus in hESCs. By using homologous recombination in human ESCs, we inserted an enhanced green fluorescent protein (eGFP) transgene into the SOX17 locus, a postulated marker of human endoderm. Sox17 is a HMG box transcription factor required for definitive endoderm development in miceFACS purification and gene expression profiling confirmed that SOX17+-hESC progeny expressed endodermal markers and unveiled specific cell surface protein combinations that permitted FACS-based isolation of primitive gut tube endodermal cells produced from unmodified human ESCs and from induced pluripotent stem cells (iPSC). Differentiating SOX17+ endo- dermal cells expressed markers of liver, pancreas, and intestinal epithelium in vitro and gave rise to endodermal progeny in vivo.