Recent studies revealing that endothelial cells derived from E8.5-E10.5 mouse embryos give rise to haematopoietic cells appear to correspond to previous histological observations that haematopoietic cell clusters are attached to the ventral aspect of dorsal aorta in such a way as if they were budding from the endothelial cell layer. Gene disruption studies have revealed that Runx1/AML1 is required for definitive haematopoiesis but not for primitive haematopoiesis, but the precise stage of gene function is not yet known. We found that mice deficient in Runx1/AML1 (an alpha subunit of the transcription factor PEBP2/CBF) lack c-Kit+ haematopoietic cell clusters in the dorsal aorta, omphalomesenteric and umbilical arteries, as well as yolk sac vessels. Moreover, endothelial cells sorted from the embryo proper and the yolk sac of AML1-/- embryos are unable to differentiate into haematopoietic cells on OP9 stromal cells, whereas colonies of AML1-/- endothelial cells can be formed in culture. These results strongly suggest that the emergence of haematopoietic cells from endothelial cells represents a major pathway of definitive haematopoiesis and is an event that also occurs in the yolk sac in vivo, as suggested by earlier in vitro experiments.