Medullary thyroid carcinoma contributes to about 3-4% of thyroid cancers and affects C cells rather than follicular cells. Thyroid C cell differentiation from human pluripotent stem cells has not been reported. We report the stepwise differentiation of human embryonic stem cells into thyroid C cell-like cells through definitive endoderm and anterior foregut endoderm and ultimobranchial body-like intermediates in monolayer and 3D Matrigel culture conditions. The protocol involved sequential treatment with interferon/transferrin/selenium/pyruvate, foetal bovine serum, and activin A, then IGF-1 (Insulin-like growth factor 1), on the basis of embryonic thyroid developmental sequence. As well as expressing C cell lineage relative to follicular-lineage markers by qPCR (quantitative polymerase chain reaction) and immunolabelling, these cells by ELISA (enzyme-linked immunoassay) exhibited functional properties in vitro of calcitonin storage and release of calcitonin on calcium challenge. This method will contribute to developmental studies of the human thyroid gland and facilitate in vitro modelling of medullary thyroid carcinoma and provide a valuable platform for drug screening.