Vascular system development requires the coordination of several cellular processes, such as cell proliferation, polarization, tube formation and junction formation. The small GTPase Cdc42 regulates many of these processes in vitro but whether it controls these events in endothelial cells (ECs) during angiogenesis in vivo is less clear. Here, Christer Betsholtz, Konstantin Gaengel and co-workers investigate Cdc42 function during vascular morphogenesis in the postnatal mouse retina. Using conditional and mosaic knockdowns, they report that Cdc42 loss causes capillary-venous malformations but, surprisingly, has little effect on EC apical-basal polarization, proliferation or lumen formation. Instead, Cdc42 is required for endothelial tip cell selection and filopodia formation, and controls the axial polarity (i.e. polarity perpendicular to the apical-basal axis) of ECs. Following on from this, the authors use in silico modelling to show that the effects of Cdc42 on filopodia formation and EC axial polarity likely drive the Cdc42 sprouting phenotype. Finally, they demonstrate that cell motility and directed cell migration are also significantly compromised following Cdc42 deletion, leading to abnormal EC distribution within vascular networks and to the formation of capillary venous malformations. Together, these and other findings in this study highlight that vascular malformations can arise as a consequence of defective cell migration, and that a balance between EC proliferation and migration is required for correct blood vessel formation.