The present invention relates to the directed differentiation of mammalian pluripotent stem cells, especially human pluripotent stem (hPS) cells, into endodermal cells. In particular, the present invention relates to the treatment of mammalian pluripotent stem cells, especially hPS cells, with a DNA demethylating agent while undergoing differentiation into endodermal. The inventors have, as disclosed herein, found that exposing differentiating mammalian pluripotent stem cells, especially hPS cells, to a DNA demethylating agent leads to an improved morphology and improved yield of endodermal cells. The treatment with a DNA de-methylating agent also leads to a significant down-regulation of expression of the stem cell marker Oct4 and to an improved expression of endoderm specific markers, notably sox17, cxcr4 and hhex.