The cardiac valvular endothelial cells (VECs) are an ideal cell source that could be used for making the valve organoids. However, few studies have been focused on the derivation of this important cell type. Here we describe a two-step chemically defined xeno-free method for generating VEC-like cells from human pluripotent stem cells (hPSCs). HPSCs were specified to KDR/ISL1 multipotent cardiac progenitors (CPCs), followed by differentiation into valve endothelial-like cells (VELs) via an intermediate endocardial cushion cell (ECC) type. Mechanistically, administration of TGFb1 and BMP4 may specify VEC fate by activating the NOTCH/WNT signaling pathways and previously unidentified targets such as ATF3 and KLF family of transcription factors. When seeded onto the surface of the de-cellularized porcine aortic valve (DCV) matrix scaffolds, hPSC-derived VELs exhibit superior proliferative and clonogenic potential than the primary VECs and human aortic endothelial cells (HAEC). Our results show that hPSC-derived valvular cells could be efficiently generated from hPSCs, which might be used as seed cells for construction of valve organoids or next generation tissue engineered heart valves.