The anterior pituitary gland produces several hormones essential for regulation of the somatic endocrine system. Deficiency of these hormones can cause life-threatening diseases, including adrenal crisis. Pituitary tissue generated from human pluripotent stem cells is expected to provide better treatment than current hormone replacement therapy. During early mammalian development, the pituitary anlage (Rathke's pouch) develops from non-neural ectoderm adjacent to the developing ventral hypothalamus. The close interaction between these two tissues is crucial for Rathke's pouch development and involves several signaling molecules. Early exposure of human embryonic stem cells in 3D floating culture to sonic hedgehog and bone morphogenetic protein 4 promoted the cells' differentiation into oral ectoderm and, subsequently, hormone-producing cells such as corticotrophs (adrenocorticotropic hormone-producing cells). The differentiation approach described herein, which induces the formation of pituitary tissue in contact with hypothalamic neural tissue, mimics mammalian pituitary development. The differentiated corticotrophs are functional, responding normally to both release and feedback signals. © 2018 by John Wiley & Sons, Inc.