Pluripotent stem cells are derived from the inner cell mass of preimplantation embryos, and display the ability of the embryonic founder cells by forming all three germ lineages in vitro. It is well established that the cellular niche plays an important role in stem cell maintenance and differentiation. Stem cells generally have limited function without the specialized microenvironment of the niche that provides key cell-cell contact, soluble mediators, and extracellular matrices. We were interested in the role that Wnt signaling, in particular Wnt3a, played in human embryonic stem cell (hESC) differentiation to hepatic endoderm in vitro. hESC differentiation to hepatic endoderm was efficient in pure stem cell populations. However, in younger hESC lines, generating stromal cell mesenchyme, our model was very inefficient. The negative effect of stroma could be reversed by pretreating hESCs with Wnt3a prior to the onset of hepatocyte differentiation. Wnt3a pretreatment reinstated efficient hESC differentiation to hepatic endoderm. These studies represent an important step in understanding hepatocyte differentiation from hESCs and the role played by the cellular niche in vitro.