Mesoangioblasts (MABs) are progenitor cells of embryonic derivation with mesodermal potential. They have been successfully used to restore skeletal muscle loss in dystrophic mice, but despite the clinical potential of these cells, their origin and role during development has not been defined. Now, on p. 1821, Silvia Brunelli and colleagues identify embryonic MABs that originate from the hemogenic endothelium during the early stages of mouse embryogenesis. The authors use a lineage tracing approach based on VE-cadherin expression to show that the MABs originate from endothelial cells (ECs) in the yolk sac and the placental tissues from approximately embryonic day (E) 8.5 until E10.5, and that these cells contribute to multiple mesodermal lineages during development, including skeletal muscle. The authors further show that this VE-Cadherin-positive extra-embryonic endothelium also generates the first wave of hematopoietic cells that colonise the embryonic mesenchyme. This study demonstrates for the first time that the embryonic hemogenic endothelium can generate extra-vascular mesodermal tissue in vivo.