Early embryos get the oxygen they need for metabolism by diffusion. After gastrulation, however, efficient oxygen delivery requires a cardiovascular system. On p. 4623,Ramírez-Bergeron and colleagues use a mouse embryonic stem (ES) cell culture system to show that hypoxic responses are important for establishing the early mesoderm and its differentiation into haemangioblasts –bipotential precursors of endothelial and haematopoietic cells. They report that hypoxia accelerates the expression of Brachyury (a mesoderm-patterning gene), BMP4 (a mesoderm-promoting growth factor) and FLK1 (the receptor for vascular endothelial growth factor and a marker for haemangioblasts). This response depends on hypoxia inducible factor (HIF), as ES cells null for the HIF subunit aryl hydrocarbon receptor nuclear translocator (ARNT) produce fewer FLK1+ cells in normoxic and hypoxic conditions. The researchers conclude that ineffective responses to hypoxia underlie the previously observed failure of Arnt–/– embryos to form a functional cardiovascular system.