We investigated the role of canonical WNT signaling in mesoderm and hematopoietic development from human embryonic stem cells (hESCs) using a recombinant human protein-based differentiation medium (APEL). In contrast to prior studies using less defined culture conditions, we found that WNT3A alone was a poor inducer of mesoderm. However, WNT3A synergized with BMP4 to accelerate mesoderm formation, increase embryoid body size, and increase the number of hematopoietic blast colonies. Interestingly, inclusion of WNT3A or a GSK3 inhibitor in methylcellulose colony-forming assays at 4 days of differentiation abrogated blast colony formation but supported the generation of mesospheres that expressed genes associated with mesenchymal lineages. Mesospheres differentiated into cells with characteristics of bone, fat, and smooth muscle. These studies identify distinct effects for WNT3A, supporting the formation of hematopoietic or mesenchymal lineages from human embryonic stem cells, depending upon differentiation stage at the time of exposure.