Human embryonic stem cells (hESC) can proliferate indefinitely while retaining the capacity to form derivatives of all three germ layers. We have reported previously that hESC differentiate into cardiomyocytes when cocultured with a visceral endoderm-like cell line (END-2). Insulin/insulin-like growth factors and their intracellular downstream target protein kinase Akt are known to protect many cell types from apoptosis and to promote proliferation, including hESC-derived cardiomyocytes. Here, we show that in the absence of insulin, a threefold increase in the number of beating areas was observed in hESC/END-2 coculture. In agreement, the addition of insulin strongly inhibited cardiac differentiation, as evidenced by a significant reduction in beating areas, as well as in alpha-actinin and beta-myosin heavy chain (beta-MHC)-expressing cells. Real-time reverse transcription-polymerase chain reaction and Western blot analysis showed that insulin inhibited cardiomyogenesis in the early phase of coculture by suppressing the expression of endoderm (Foxa2, GATA-6), mesoderm (brachyury T), and cardiac mesoderm (Nkx2.5, GATA-4). In contrast to previous reports, insulin was not sufficient to maintain hESC in an undifferentiated state, since expression of the pluripotency markers Oct3/4 and nanog declined independently of the presence of insulin during coculture. Instead, insulin promoted the expression of neuroectodermal markers. Since insulin triggered sustained phosphorylation of Akt in hESC, we analyzed the effect of an Akt inhibitor during coculture. Indeed, the inhibition of Akt or insulin-like growth factor-1 receptor reversed the insulin-dependent effects. We conclude that in hESC/END-2 cocultures, insulin does not prevent differentiation but favors the neuroectodermal lineage at the expense of mesendodermal lineages.