The secreted glycoprotein YKL-40 participates in cell differentiation, inflammation, and cancer progression. High YKL-40 expression is reported during early human development, but its functions are unknown. Six human embryonic stem cell (hESC) lines were cultured in an atmosphere of low or high oxygen tension, in culture medium with or without basic fibroblast growth factor, and on feeder layers comprising mouse embryonic fibroblasts or human foreskin fibroblasts to evaluate whether hESCs and their progeny produced YKL-40 and to characterize YKL-40 expression during differentiation. Secreted YKL-40 protein and YKL-40 mRNA expression were measured by enzyme-linked immunosorbent assay (ELISA) and quantitative RT-PCR. Serial-sectioned colonies were stained for YKL-40 protein and for pluripotent hESC (OCT4, NANOG) and germ layer (HNF-3ß, PDX1, CD34, p63, nestin, PAX6) markers. Double-labeling showed YKL-40 expression in OCT4-positive hESCs, PAX6-positive neuroectodermal cells, and HNF-3ß-positive endodermal cells. The differentiating progeny showed strong YKL-40 expression. Abrupt transition between YKL-40 and OCT4-positive hESCs and YKL-40-positive ecto- and neuroectodermal lineages was observed within the same epithelial-like layer. YKL-40-positive cells within deeper layers lacked contact with OCT4-positive cells. YKL-40 may be important in initial cell differentiation from hESCs toward ectoderm and neuroectoderm, with retained epithelial morphology, whereas later differentiation into endoderm and mesoderm involves a transition into the deeper layers of the colony.