During embryonic life, hematopoiesis occurs first in the yolk sac, followed by the aorto-gonado-mesonephric region, the fetal liver, and the bone marrow. The possibility of hematopoiesis in other embryonic sites has been suspected for a long time. With the use of different methodologies (transgenic mice, electron microscopy, laser capture microdissection, organ culture, and cross-transplant experiments), we show that multiple regions within the embryo are capable of forming blood before and during organogenesis. This widespread phenomenon occurs by hemo-vasculogenesis, the formation of blood vessels accompanied by the simultaneous generation of red blood cells. Erythroblasts develop within aggregates of endothelial cell precursors. When the lumen forms, the erythroblasts "bud" from endothelial cells into the forming vessel. The extensive hematopoietic capacity found in the embryo helps explain why, under pathological circumstances such as severe anemia, extramedullary hematopoiesis can occur in any adult tissue. Understanding the intrinsic ability of tissues to manufacture their own blood cells and vessels has the potential to advance the fields of organogenesis, regeneration, and tissue engineering.