ATF6 encodes a transcription factor that is anchored in the endoplasmic reticulum (ER) and activated during the unfolded protein response (UPR) to protect cells from ER stress. Deletion of the isoform activating transcription factor 6α (ATF6α) and its paralog ATF6β results in embryonic lethality and notochord dysgenesis in nonhuman vertebrates, and loss-of-function mutations in ATF6α are associated with malformed neuroretina and congenital vision loss in humans. These phenotypes implicate an essential role for ATF6 during vertebrate development. We investigated this hypothesis using human stem cells undergoing differentiation into multipotent germ layers, nascent tissues, and organs. We artificially activated ATF6 in stem cells with a small-molecule ATF6 agonist and, conversely, inhibited ATF6 using induced pluripotent stem cells from patients with ATF6 mutations. We found that ATF6 suppressed pluripotency, enhanced differentiation, and unexpectedly directed mesodermal cell fate. Our findings reveal a role for ATF6 during differentiation and identify a new strategy to generate mesodermal tissues through the modulation of the ATF6 arm of the UPR.