Optogenetics is a rapidly advancing technology combining photochemical, optical, and synthetic biology to control cellular behavior. Together, sensitive light-responsive optogenetic tools and human pluripotent stem cell differentiation models have the potential to fine-tune differentiation and unpick the processes by which cell specification and tissue patterning are controlled by morphogens. We used an optogenetic bone morphogenetic protein (BMP) signaling system (optoBMP) to drive chondrogenic differentiation of human embryonic stem cells (hESCs). We engineered light-sensitive hESCs through CRISPR-Cas9-mediated integration of the optoBMP system into the AAVS1 locus. The activation of optoBMP with blue light, in lieu of BMP growth factors, resulted in the activation of BMP signaling mechanisms and upregulation of a chondrogenic phenotype, with significant transcriptional differences compared to cells in the dark. Furthermore, cells differentiated with light could form chondrogenic pellets consisting of a hyaline-like cartilaginous matrix. Our findings indicate the applicability of optogenetics for understanding human development and tissue engineering.