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Abstract Optimizing the efficiency of definitive endoderm (DE) differentiation is necessary for the generation of diverse organ-like structures. In this study, we used the small molecule inhibitor saracatinib (SAR) to enhance DE differentiation of human embryonic stem cells and induced pluripotent stem cells. SAR significantly improved DE differentiation efficiency at low concentrations. The interaction between SAR and Focal Adhesion Kinase (FAK) was explored through RNA-seq and molecular docking simulations, which further supported the inhibition of DE differentiation by p-FAK overexpression in SAR-treated cells. In addition, we found that SAR inhibited the nuclear translocation of Yes-associated protein (YAP), a downstream effector of FAK, which promoted DE differentiation. Moreover, the addition of SAR enabled a significant reduction in activin A (AA) from 50 to 10 ng/mL without compromising DE differentiation efficiency. For induction of the pancreatic lineage, 10 ng/ml AA combined with SAR at the DE differentiation stage yielded a comparative number of PDX1+/NKX6.1+ pancreatic progenitor cells to those obtained by 50 ng/ml AA treatment. Our study highlights SAR as a potential modulator that facilitates the cost-effective generation of DE cells and provides insight into the orchestration of cell fate determination. Graphical Abstract