Mice nullizygous for Plcg1 cease growing at early to mid-gestation. An examination of carefully preserved wild-type embryos shows clear evidence of erythropoiesis, but erythropoiesis is not evident in Plcg1 nullizygous embryos at the same stage. The analyses of embryonic materials demonstrate that in the absence of Plcg1, erythroid progenitors cannot be detected in the yolk sac or embryo body by three different assays, burst-forming units, colony-forming units, and analysis for the developmental marker Ter119. However, non-erythroid granulocyte/macrophage colonies are produced by Plcg1 null embryos. Further analysis of these embryos demonstrates significantly diminished vasculogenesis in Plcg1 nullizygous embryos based on the lack of expression of the endothelial marker platelet endothelial cell adhesion molecule-1. In addition, Plcg1 nullizygous embryos express a greatly reduced level of vascular endothelial growth factor receptor-2/Flk-1, consistent with significantly impaired vasculogenesis and erythropoiesis. Interestingly, these early embryos do express phospholipase C-gamma2, however, it is unable to substitute for the absence of phospholipase C-gamma1, which can be detected in its tyrosine-phosphorylated state.