In this report we demonstrate a role for Runx1 (AML1) at the hemangioblast stage of hematopoietic and endothelial development in embryonic stem (ES) cell-derived embryoid bodies (EBs). Runx1 is expressed in EBs during the appearance of precursors with hemangioblast properties, the blast colony-forming cells (BL-CFCs). Cell sorting studies revealed that all BL-CFCs within EBs express Runx1. Runx1-deficient EBs consistently generate 10- to 20-fold fewer blast colonies than wild-type controls and display a complete block in definitive hematopoiesis. Despite this defect, Runx1-/- EBs and yolk sacs from mutant embryos generate normal numbers of primitive erythroid precursors. These observations clearly demonstrate that Runx1 functions early in hematopoietic development, and they support the interpretation that the primitive erythroid lineage is established early by a subset of BL-CFCs that develop in a Runx1-independent fashion.