Specifically directing stem cell differentiation to create different cell types is useful for the development of therapeutic approaches and pharmaceutical screens. By using chemical compounds, this has been done by Melanie Welham and colleagues (p. 1992), who describe a small-molecule inhibitor of glycogen synthase kinase 3 (GSK3) that can drive differentiation of human embryonic stem cells (hESCs) into definitive endoderm with hepatic potential. In mouse ESCs, inhibition of GSK3 leads to enhanced self-renewal. By contrast, treatment of hESCs with the GSK3 inhibitor 1m results in the opposite effect: 1m-treated hESCs induce a differentiation program. These cells initially form a state that resembles the primitive streak and then differentiate into mesoderm and endoderm, the authors observe. This loss of pluripotency is mediated by the activation of the Wnt–β-catenin pathway, and a rapid and transient upregulation of NODAL gene expression. In a further set of experiments, the authors show that prolonged GSK3 inhibition results in cells with hepatoblast characteristics and the 1m-induced definitive endoderm matures into hepatocyte-like cells. The authors hope that these results form the basis for the development of a useful therapy for liver failure, and provide a model system in which to study liver function and disease.