Some of the questions that have intrigued developmental biologists studying blood cell formation are: where do blood cells form, what are their precursors, and what signals are required for their emergence. Elegant embryonic grafting experiments in non-mammalian vertebrates, transplantation assays in mouse, and genetic analyses in zebrafish and mouse have been brought to bear on these problems, with enormous success. More recently investigators have applied conditional gene deletion and replacement strategies to refine our knowledge of this process in mammals. Here we describe several studies that have used the Cre/LoxP system to study blood cell formation, and what has been learned as a result.