Human embryonic stem cells (hESCs) randomly differentiate into multiple cell types during embryoid body (EB) development. To date, characterization of specific factors capable of influencing hematopoietic cell fate from hESCs remains elusive. Here, we report that the treatment of hESCs during EB development with a combination of cytokines and bone morphogenetic protein-4 (BMP-4), a ventral mesoderm inducer, strongly promotes hematopoietic differentiation. Hematopoietic progenitors of multiple lineages were generated from EBs and were found to be restricted to the population of progeny expressing cell surface CD45. Addition of BMP-4 had no statistically significant effect on hematopoietic differentiation but enabled significant enhancement in progenitor self-renewal, independent of cytokine treatment. Hematopoietic commitment was characterized as the temporal emergence of single CD45+ cells first detectable after day 10 of culture and was accompanied by expression of hematopoietic transcription factors. Despite the removal of cytokines at day 10, hematopoietic differentiation of hESCs continued, suggesting that cytokines act on hematopoietic precursors as opposed to differentiated hematopoietic cells. Our study establishes the first evidence for the role of cytokines and BMP-4 in promoting hematopoietic differentiation of hESC lines and provides an unprecedented system to study early developmental events that govern the initiation of hematopoiesis in the human.