To search for genes that promote hematopoietic development from human embryonic stem cells (hESCs) and induced pluripotent stem cells (iPSCs), we overexpressed several known hematopoietic regulator genes in hESCs/iPSCs-derived CD34(+)CD43(-) endothelial cells (ECs) enriched in hemogenic endothelium. Among the genes tested, only Sox17, a gene encoding a transcription factor of the SOX family, promoted cell growth and supported expansion of CD34(+)CD43(+)CD45(-/low) cells expressing the hemogenic endothelial marker VE-cadherin. SOX17 was expressed at high levels in CD34(+)CD43(-) ECs compared to low levels in CD34(+)CD43(+)CD45(-) pre-hematopoietic progenitor cells (pre-HPCs) and CD34(+)CD43(+)CD45(+) HPCs. Sox17-overexpressing cells formed semi-adherent cell aggregates and generated few hematopoietic progenies. However, they retained hemogenic potential and gave rise to hematopoietic progenies upon inactivation of Sox17. Global gene expression analyses revealed that the CD34(+)CD43(+)CD45(-/low) cells expanded upon overexpression of Sox17 are hemogenic endothelium-like cells developmentally placed between ECs and pre-HPCs. Of interest, Sox17 overexpression also reprogrammed both pre-HPCs and HPCs into hemogenic endothelium-like cells. Genome-wide mapping of Sox17 binding sites revealed that Sox17 directly activates transcription of key regulator genes for vasculogenesis, hematopoiesis, and erythrocyte differentiation. Depletion of SOX17 in CD34(+)CD43(-) ECs severely compromised their hemogenic activity. These findings suggest that SOX17 plays a key role in priming hemogenic potential in ECs, thereby regulating hematopoietic development from hESCs/iPSCs.