CREB-binding protein (CBP) and the closely related adenovirus E1A-associated 300-kD protein (p300) function as coactivators of transcription factors such as CREB, c-Fos, c-Jun, c-Myb, and several nuclear receptors. To study the roles of CBP in embryonic development, we generated CBP homozygous mutant mouse embryos that expressed a truncated form of CBP protein (1-1084 out of 2441 residues). The embryos died between embryonic days 9.5 (E9.5) and E10.5 and exhibited a defect in neural tube closure. They appeared pale and showed decreases in erythroid cells and colony-forming cells (CFCs) in the yolk sac, suggesting defects in primitive hematopoiesis. Immunohistochemistry with an anti-PECAM antibody showed a lack of vascular network formation. Organ culture of para-aortic splanchnopleural mesoderm (P-Sp) with stromal cells (OP9) showed an autonomous abnormality of putative endothelial precursors, which may induce the microenvironmental defect in hematopoiesis. In addition, these defects were partially rescued by the addition of VEGF to this culture. Our analyses demonstrate that CBP plays an essential role in hematopoiesis and vasculo-angiogenesis.