Flk1 is the major receptor for VEGF on endothelial cells. During embryogenesis, flk1 is required for both vasculogenesis and angiogenesis and abnormally elevated flk1 expression is often associated with pathological conditions in adults. While the biological function of flk1 has been studied extensively, very little is known about how the flk1 gene is regulated at the transcriptional level. Our transgenic study led to the identification of a flk1 endothelial enhancer positioned approximately 5 kb upstream of the flk1 translation initiation site. Binding sites for FoxH1, scl, ets and gata factors are found in the zebrafish flk1 endothelial enhancer, as well as in upstream sequences of mouse flk1 and human kdr genes, suggesting that the regulatory machinery for flk1/kdr is conserved from fish to mammals. The roles of scl, ets and gata factors in hemangioblasts have been well defined, but the significance of FoxH1 in vessel formation has not been explored previously. Here we show that FoxH1 binds to the flk1 endothelial enhancer in vitro and functions as a repressor for flk1 transcription in cultured cells. Consistent with these findings, the expression level of flk1 is elevated in embryos lacking both maternal and zygotic FoxH1. We further show that overexpression of FoxH1 has a negative effect on vascular formation that can be counteracted by the down-regulation of smad2 activity in zebrafish embryos. Taken together, our data provide the first evidence that flk1 is a direct target of FoxH1 and that FoxH1 is involved in vessel formation in zebrafish.