Significant progress has been made towards a better understanding of the establishment of hematopoiesis in the embryo. Hematopoietic precursors have been shown to arise independently in the yolk sac and in the intra-embryonic mesoderm. From the combined analysis of differentiation potentials, expression patterns and mutant phenotypes, a picture has emerged: definitive hematopoietic precursors are transiently generated in a specific environment close to the endothelium of the main arteries.