Somatic cells can be reprogrammed into pluripotent stem cells (PSCs) by using pure chemicals, providing a different paradigm to study somatic reprogramming. However, the cell fate dynamics and molecular events that occur during the chemical reprogramming process remain unclear. We now show that the chemical reprogramming process requires the early formation of extra-embryonic endoderm (XEN)-like cells and a late transition from XEN-like cells to chemically- induced (Ci)PSCs, a unique route that fundamentally differs from the pathway of transcription factor-induced reprogramming. Moreover, precise manipulation of the cell fate transition in a step-wise manner through the XEN-like state allows us to identify small-molecule boosters and establish a robust chemical reprogramming system with a yield up to 1,000-fold greater than that of the previously reported protocol. These findings demonstrate that chemical reprogramming is a promising approach to manipulate cell fates.