Mouse somatic cells can be chemically reprogrammed into pluripotent stem cells (CiPSCs) through an intermediate extraembryonic endoderm (XEN)-like state. However, it is elusive how the chemicals orchestrate the cell fate alteration. In this study, we analyze molecular dynamics in chemical reprogramming from fibroblasts to a XEN-like state. We find that Sox17 is initially activated by the chemical cocktails, and XEN cell fate specialization is subsequently mediated by Sox17 activated expression of other XEN master genes, such as Sall4 and Gata4. Furthermore, this stepwise process is differentially regulated. The core reprogramming chemicals CHIR99021, 616452 and Forskolin are all necessary for Sox17 activation, while differently required for Gata4 and Sall4 expression. The addition of chemical boosters in different phases further improves the generation efficiency of XEN-like cells. Taken together, our work demonstrates that chemical reprogramming is regulated in 3 distinct "prime-specify-transit" phases initiated with endogenous Sox17 activation, providing a new framework to understand cell fate determination.