The isolation of human embryonic stem (ES) cells in 1998 advanced the dream of replacement tissues on demand but we still need to learn how to turn ES cells efficiently into different cell types. On p. 2749, Park and colleagues describe a temporal sequence of factors that turns murine ES cells into FLK1- and SCL-expressing haematopoietic and endothelial progenitors. The researchers show that BMP4 is required for the sequential generation of FLK+ and SCL+ cells from ES cells in serum-free conditions. Expansion of the SCL+ cells is mediated by VEGF, and,they report, TGFβ1 and activin A inhibit and augment, respectively, the effects of VEGF. These and other results presented by Park et al. bring tissue engineering a step closer, at least for haematopoietic and endothelial cells.