Vertebrate hematopoiesis occurs in two distinct phases, primitive (embryonic) and definitive (adult). Genes that are required specifically for the definitive program, or for both phases of hematopoiesis, have been described. However, a specific regulator of primitive hematopoiesis has yet to be reported. The zebrafish bloodless (bls) mutation causes absence of embryonic erythrocytes in a dominant but incompletely penetrant manner. Primitive macrophages appear to develop normally in bls mutants. Although the thymic epithelium forms normally in bls mutants, lymphoid precursors are absent. Nonetheless, the bloodless mutants can progress through embryogenesis, where red cells begin to accumulate after 5 days post-fertilization (dpf). Lymphocytes also begin to populate the thymic organs by 7.5 dpf. Expression analysis of hematopoietic genes suggests that formation of primitive hematopoietic precursors is deficient in bls mutants and those few blood precursors that are specified fail to differentiate and undergo apoptosis. Overexpression of scl, but not bmp4 or gata1, can lead to partial rescue of embryonic blood cells in bls. Cell transplantation experiments show that cells derived from bls mutant donors can differentiate into blood cells in a wild-type host, but wild-type donor cells fail to form blood in the mutant host. These observations demonstrate that the bls gene product is uniquely required in a non-cell autonomous manner for primitive hematopoiesis, potentially acting via regulation of scl.