Long noncoding RNAs (lncRNAs) exhibit diverse functions, including regulation of development. Here, we combine genome-wide mapping of SMAD3 occupancy with expression analysis to identify lncRNAs induced by activin signaling during endoderm differentiation of human embryonic stem cells (hESCs). We find that DIGIT is divergent to Goosecoid (GSC) and expressed during endoderm differentiation. Deletion of the SMAD3-occupied enhancer proximal to DIGIT inhibits DIGIT and GSC expression and definitive endoderm differentiation. Disruption of the gene encoding DIGIT and depletion of the DIGIT transcript reveal that DIGIT is required for definitive endoderm differentiation. In addition, we identify the mouse ortholog of DIGIT and show that it is expressed during development and promotes definitive endoderm differentiation of mouse ESCs. DIGIT regulates GSC in trans, and activation of endogenous GSC expression is sufficient to rescue definitive endoderm differentiation in DIGIT-deficient hESCs. Our study defines DIGIT as a conserved noncoding developmental regulator of definitive endoderm.