The primary goal of regenerative medicine is the in vitro derivation of cells that are functional and safe for transplantation into patients. Although progress has been made towards this goal there are no clinical applications that utilize cells derived in vitro from pluripotent stem cells or reprogrammed primary cells. The foremost reason for this is an incomplete understanding of the development processes that regulate cell identity. In order to gain a better understanding of the specification of hematopoietic stem cells (HSC), I studied their de novo generation during embryogenesis. Using confocal microscopy, I mapped out hematopoiesis during midgestation and discovered that it is less spatially restricted than previously thought. I identified two new sites of blood formation, the dorsal longitudinal anastomotic vessels and the intersomitic vessels. I also identified three waves of hematopoiesis in the heart. During the final wave of cardiac hematopoiesis, spherical protrusions of endocardium encapsulating hematopoietic cells called cardiac blood islands (CBIs) form on the ventricles. CBIs pinch off from the ventricle and contribute to the coronary vasculature in a novel mechanism of vasculogenesis. Interestingly, loss of the RAS GTPase activating protein Nf1 significantly increases the total number of CBIs. Furthermore, I found that the mechanism of vasculogenesis employed by the heart also occurs from the umbilical and vitelline arteries. During midgestation clusters of hematopoietic cells detach from the artery forming extravascular islands. The extravascular islands than sprout and contribute to nearby vessels. My studies revealed new sites of hematopoiesis and shed light on a novel mechanism of vasculogenesis that is coupled with embryonic hematopoiesis. In the final section of this dissertation, I discuss the precursors of HSCs called hemogenic endothelium (HE). HE undergoes an endothelial to hematopoietic transition (EHT), which is dependent on the transcription factor, Runx1. Runx1 activates hematopoietic genes and inhibits endothelial genes resulting in the endothelial to hematopoietic transition. By ectopically expressing Runx1 in endothelium, I found that embryonic and fetal populations are competent to respecification into multilineage hematopoietic cells but adult endothelium is not. Understanding the specification of HE will be imperative for the successful derivation of HSCs in vitro.