During embryonic development, multiple signaling pathways control specification, migration, and differentiation of the vascular endothelial cell precursors, angioblasts. No single gene responsible for the commitment of mesenchymal cells to the angioblast cell fate has been identified as yet. Here we report characterization and functional studies of Etsrp, a novel zebrafish ETS domain protein. etsrp embryonic expression is only restricted to vascular endothelial cells and their earliest precursors. Morpholino knockdown of Etsrp protein function resulted in the complete absence of circulation in zebrafish embryos. Angioblasts in etsrp-morpholino-injected embryos (morphants) failed to undergo migration and differentiation and did not coalesce into functional blood vessels. Expression of all vascular endothelial molecular markers tested was severely reduced in etsrp morphants, whereas hematopoietic markers were not affected. Overexpression of etsrp RNA caused multiple cell types to express vascular endothelial markers. etsrp RNA restored expression of vascular markers in cloche mutants, defective in hematopoietic and endothelial cell formation, arguing that etsrp functions downstream of cloche in angioblast formation. etsrp gene function was also required for endothelial marker induction by the vascular endothelial growth factor (vegf) and stem cell leukemia (scl/tal1). These results demonstrate that Etsrp is necessary and sufficient for the initiation of vasculogenesis.