The molecular mechanisms that regulate human blood vessel formation during early development are largely unknown. Here we used human ESCs (hESCs) as an in vitro model to explore early human vasculogenesis. We demonstrated that stromal cell-derived factor-1 (SDF-1) and CXCR4 were expressed concurrently with hESC-derived embryonic endothelial differentiation. Human ESC-derived embryonic endothelial cells underwent dose-dependent chemotaxis to SDF-1, which enhanced vascular network formation in Matrigel. Blocking of CXCR4 signaling abolished capillary-like structures induced by SDF-1. Inhibition of the SDF-1/CXCR4 signaling pathway by AMD3100, a CXCR4 antagonist, disrupted the endothelial sprouting outgrowth from human embryoid bodies, suggesting that the SDF-1/CXCR4 axis plays a critical role in regulating initial vessel formation, and may function as a morphogen during human embryonic vascular development.