The homeobox gene Mixl1 is expressed in the primitive streak of the gastrulating embryo, and marks cells destined to form mesoderm and endoderm. The role of Mixl1 in development of haematopoietic mesoderm was investigated by analysing the differentiation of ES cells in which GFP was targeted to one (Mixl1(GFP/w)) or both (Mixl1(GFP/GFP)) alleles of the Mixl1 locus. In either case, GFP was transiently expressed, with over 80% of cells in day 4 embryoid bodies (EBs) being GFP(+). Up to 45% of Mixl1(GFP/w) day 4 EB cells co-expressed GFP and the haemangioblast marker FLK1, and this doubly-positive population was enriched for blast colony forming cells (BL-CFCs). Mixl1-null ES cells, however, displayed a haematopoietic defect characterised by reduced and delayed Flk1 expression and a decrease in the frequency of haematopoietic CFCs. These data indicated that Mixl1 was required for efficient differentiation of cells from the primitive streak stage to blood. Differentiation of ES cells under serum-free conditions demonstrated that induction of Mixl1- and Flk1-expressing haematopoietic mesoderm required medium supplemented with BMP4 or activin A. In conclusion, this study has revealed an important role for Mixl1 in haematopoietic development and demonstrates the utility of the Mixl1(GFP/w) ES cells for evaluating growth factors influencing mesendodermal differentiation.