Investigating development of inaccessible human tissues like embryonic endoderm with embryonic stem cell (ESC) has been hindered by a lack of methods for marking and isolating endodermal cells, and tracing fates of their progeny toward differentiated lineages. Using homologous recombination in human ESC, we inserted an enhanced green fluorescent protein (eGFP) transgene into a locus encoding a postulated marker of human endoderm, SOX17, permitting purification of SOX17+ hESC progeny by fluorescence activated cell sorting (FACS). Microarray studies revealed a unique gene expression profile of human SOX17+ cells including endodermal marker enrichment, and unveiled specific cell surface protein combinations that permitted FACS-based isolation of primitive gut tube endodermal cells produced from unmodified human ESCs and from induced pluripotent stem cells (iPSC). FACS-isolated SOX17+ endodermal cells differentiated to progeny expressing markers of liver, pancreas, and intestinal epithelium, providing unprecedented evidence that human gastrointestinal lineages derive from SOX17+ cells. Thus, prospective isolation, lineage tracing, and developmental studies of hESCs described here have revealed fundamental aspects of human endodermal biology.