The use of WNT-inhibitory molecules such as DKK1 has been previously proposed for the derivation of telencephalic and optic progenitors during mouse and human ESC differentiation (Lamba et al., 2006; Watanabe et al., 2005). We demonstrate that the tankyrase-inhibitor XAV939 (Huang et al., 2009) can replace recombinant DKK1 for enhancing forebrain induction using the dual-SMAD inhibition protocol. The use of only three small molecules (XLSB protocol) renders our induction conditions well-defined, cost-effective and robust across multiple cell lines. XLSB thus represents a general platform for generating forebrain lineages including cortical interneurons.