Blood and endothelial cells arise in close association in developing embryos, possibly from a shared precursor, the haemangioblast, or as haemogenic endothelium. The transcription factor, Scl/Tal1, is essential for haematopoiesis but thought to be required only for remodelling of endothelium in mouse embryos. By contrast, it has been implicated in haemangioblast formation in embryoid bodies. To resolve the role of scl in endothelial development, we knocked down its synthesis in zebrafish embryos where early precursors and later phenotypes can be more easily monitored. With respect to blood, the zebrafish morphants phenocopied the mouse knockout and positioned scl in the genetic hierarchy. Importantly, endothelial development was also clearly disrupted. Dorsal aorta formation was substantially compromised and gene expression in the posterior cardinal vein was abnormal. We conclude that scl is especially critical for the development of arteries where adult haematopoietic stem cells emerge, implicating scl in the formation of haemogenic endothelium.