We have developed a rapid, bead-based combinatorial screening method to determine optimal combinations of variables that direct stem cell differentiation to produce known or novel cell types having pre-determined characteristics. Here we describe three experiments comprising stepwise exposure of mouse or human embryonic cells to 10,000 combinations of serum-free differentiation media, through which we discovered multiple novel, efficient and robust protocols to generate a number of specific hematopoietic and neural lineages. We further demonstrate that the technology can be used to optimize existing protocols in order to substitute costly growth factors with bioactive small molecules and/or increase cell yield, and to identify in vitro conditions for the production of rare developmental intermediates such as an embryonic lymphoid progenitor cell that has not previously been reported.