The functional diversity of the arterial and venous endothelia is regulated through a complex system of signalling pathways and downstream transcription factors. Here we report that the transcription factor Sox17, which is known as a regulator of endoderm and hemopoietic differentiation, is selectively expressed in arteries, and not in veins, in the mouse embryo and in mouse postnatal retina and adult. Endothelial cell-specific inactivation of Sox17 in the mouse embryo is accompanied by a lack of arterial differentiation and vascular remodelling that results in embryo death in utero. In mouse postnatal retina, abrogation of Sox17 expression in endothelial cells leads to strong vascular hypersprouting, loss of arterial identity and large arteriovenous malformations. Mechanistically, Sox17 acts upstream of the Notch system and downstream of the canonical Wnt system. These data introduce Sox17 as a component of the complex signalling network that orchestrates arterial/venous specification.