The endothelial cell-specific vascular endothelial growth factor (VEGF) and its cellular receptors Flt-1 and Flk-1 have been implicated in the formation of the embryonic vasculature. This is suggested by their colocalized expression during embryogenesis and the impaired vessel formation in Flk-1 and Flt-1 deficient embryos. However, because Flt-1 also binds placental growth factor, a VEGF homologue, the precise role of VEGF was unknown. Here we report that formation of blood vessels was abnormal, but not abolished, in heterozygous VEGF-deficient (VEGF+/-) embryos, generated by aggregation of embryonic stem (ES) cells with tetraploid embryos (T-ES) and even more impaired in homozygous VEGF-deficient (VEGF-/-) T-ES embryos, resulting in death at mid-gestation. Similar phenotypes were observed in F1-VEGF+/- embryos, generated by germline transmission. We believe that this heterozygous lethal phenotype, which differs from the homozygous lethality in VEGF-receptor-deficient embryos, is unprecedented for a targeted autosomal gene inactivation, and is indicative of a tight dose-dependent regulation of embryonic vessel development by VEGF.