The vertebrae mesoderm is a source of cells that forms a variety of tissues, including the heart, vasculature, and blood. Consequently, the derivation of various mesoderm-specific cell types from human embryonic stem cells (hESCs) has attracted the interest of many investigators owing to their therapeutic potential in clinical applications. However, the need for efficient and reliable methods of differentiation into mesoderm lineage cell types remains a significant challenge. Here, we demonstrated that inhibition of glycogen synthase kinase-3 (GSK-3) is an essential first step toward efficient generation of the mesoderm. Under chemically defined conditions without additional growth factors/cytokines, short-term GSK inhibitor (GSKi) treatment effectively drives differentiation of hESCs into the primitive streak (PS), which can potentially commit toward the mesoderm when further supplemented with bone morphogenetic protein 4. Further analysis confirmed that the PS-like cells derived from GSKi treatment are bipotential, being able to specify toward the endoderm as well. Our findings suggest that the bipotential, PS/mesendoderm-like cell population exists only at the initial stages of GSK-3 inhibition, whereas long-term inhibition results in an endodermal fate. Lastly, we demonstrated that our differentiation approach could efficiently generate lateral plate (CD34(+)KDR(+)) and paraxial (CD34(-)PDGFRα(+)) mesoderm subsets that can be further differentiated along the endothelial and smooth muscle lineages, respectively. In conclusion, our study presents a unique approach for generating early mesoderm progenitors in a chemically directed fashion through the use of small-molecule GSK-3 inhibitor, which may be useful for future applications in regenerative medicine.