Human embryonic stem cells (hESCs) can exit the self-renewal programme, through the action of signalling molecules, at any given time and differentiate along the three germ layer lineages. We have systematically investigated the specific roles of three signalling pathways, TGFβ/SMAD2, BMP/SMAD1, and FGF/ERK, in promoting the transition of hESCs into the neuroectoderm lineage. In this context, inhibition of SMAD2 and ERK signalling served to cooperatively promote exit from hESC self-renewal through the rapid downregulation of NANOG and OCT4. In contrast, inhibition of SMAD1 signalling acted to maintain SOX2 expression and prevent non-neural differentiation via HAND1. Inhibition of FGF/ERK upregulated OTX2 that subsequently induced the neuroectodermal fate determinant PAX6, revealing a novel role for FGF2 in indirectly repressing PAX6 in hESCs. Combined inhibition of the three pathways hence resulted in highly efficient neuroectoderm formation within 4 days, and subsequently, FGF/ERK inhibition promoted rapid differentiation into peripheral neurons. Our study assigns a novel, biphasic role to FGF/ERK signalling in the neural induction of hESCs, which may also have utility for applications requiring the rapid and efficient generation of peripheral neurons.