Mouse embryos lacking the receptor tyrosine kinase, Flk1, die without mature endothelial and hematopoietic cells. To investigate the role of Flk1 during vasculogenesis and hematopoiesis, we examined the developmental potential of Flk1^−/− embryonic stem cells in chimeras. We show that Flk1 is required cell autonomously for endothelial development. Furthermore, Flk1^−/− cells do not contribute to primitive hematopoiesis in chimeric yolk sacs or definitive hematopoiesis in adult chimeras and chimeric fetal livers. We also demonstrate that cells lacking Flk1 are unable to reach the correct location to form blood islands, suggesting that Flk1 is involved in the movement of cells from the posterior primitive streak to the yolk sac and, possibly, to the intraembryonic sites of early hematopoiesis.