The conversion of embryonic stem (ES) cells into haematopoietic precursors in vitro could have important clinical applications, but strategies that achieve this feat usually require the use of feeder cells or serum. Now, Po-Min Chiang and Philip Wong describe a method for converting murine ES cells into endothelial cells and blood precursors at low cell densities in a serum-free defined medium (see p. 2833). The researchers identify a set of cytokines and small molecules that are necessary and sufficient to convert ES cells into definitive haematopoietic precursors within 6 days, and by tracking the fate of single progenitors with time-lapse video microscopy they follow this stepwise differentiation process. The determination of haemogenic fate, they report, occurs as early as day 4 of this differentiation protocol. Moreover, BMP4 plays essential time-sensitive roles in both angiogenesis and haemogenesis. This protocol, the researchers suggest, could thus serve as a framework for future studies of human haematopoiesis and for the development of treatments for haematopoietic disorders.