Human embryonic stem-like cells (hESCs) are pluripotent cells derived from blastocysts. Differentiating hESCs into respiratory lineages may benefit respiratory therapeutic programs. We previously demonstrated that 24% of all mouse embryonic stem cell derivatives co-cultured with embryonic day 11.5 (E11.5) mouse lung rudiments display immunoreactivity to the pneumonocyte II specific marker surfactant-associated protein C (Sftpc). Here we further investigate the effects of this inductive niche in terms of its competence to induce hESC derivative SFTPC immunoreactivity and the expression of other markers of terminal lung secretory units. When hESCs were co-cultured as single cells, clumps of approximately 10 cells or embryoid bodies (EBs), hESC derivatives formed pan-keratin positive epithelial tubules at high frequency (>30% of all hESC derivatives). However, human-specific SFTPC immunoreactivity associated with tubule formation only at low frequency (<0.1% of all hESC derivatives). Human-specific SFTPD and Secretoglobin family 1A member 1 (SCGB1A1, also known as CC10) transcripts were detected by PCR after prolonged culture. Expression of other terminal lung secretory unit markers (TITF1, SFTPA and SFTPB) was not detected at any time point analysed. On the other hand, hESC derivatives cultured as plated EBs in media previously demonstrated to induce Sftpc expression in isolated mouse fetal tracheal epithelium, expressed all terminal lung secretory unit markers examined. mESCs and hESCs thus display fundamental differences in their response to the E11.5 mouse lung inductive niche and these data provide an important step in the delineation of signaling mechanisms capable of efficiently inducing hESC differentiation into terminal secretory units of the lung.