Unravelling the embryonic origins of the haematopoietic system has been the subject of sustained research for more than a century. Nevertheless, many important questions are still either unanswered or remain a matter of intense debate. Recent progress in mouse and embryonic stem cell model systems as well as imaging and post-genomic technologies has provided new insights into many of these open questions. Here we place into context recent reports on the anatomical site of blood stem cell emergence and, using red blood cells as an example, illustrate how the development of stem cells and the other blood lineages is both temporally and spatially decoupled. In addition, we outline how embryonic stem cell assays are increasingly used as a powerful surrogate for studying lineage relationships and developmental potential of early embryonic blood progenitors. Finally, we review how recent progress in the reconstruction of transcriptional regulatory networks is beginning to define the connectivity between key regulators that control early blood development. In light of these rapid recent advances, research into the embryonic origins of the haematopoietic system should remain one of the most vibrant disciplines within the wider field of haematology for the foreseeable future.