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 hESC/iPSC-derived CD34⁺CD43⁻ endothelial cells (ECs) enriched in hemogenic endothelium (HE). 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 HE marker VE-cadherin. SOX17 was expressed at high levels in CD34⁺CD43⁻ ECs compared with low levels in CD34⁺CD43⁺CD45⁻ pre-hematopoietic progenitor cells (pre-HPCs) and CD34⁺CD43⁺CD45⁺ HPCs. Sox17-overexpressing cells formed semiadherent cell aggregates and generated few hematopoietic progenies. However, they retained hemogenic potential and gave rise to hematopoietic progenies on inactivation of Sox17. Global gene-expression analyses revealed that the CD34⁺CD43⁺CD45^−/low cells expanded on overexpression of Sox17 are HE-like cells developmentally placed between ECs and pre-HPCs. Sox17 overexpression also reprogrammed both pre-HPCs and HPCs into HE-like cells. Genome-wide mapping of Sox17-binding sites revealed that Sox17 activates the transcription of key regulator genes for vasculogenesis, hematopoiesis, and erythrocyte differentiation directly. 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.