Anatomical observations made at the beginning of the twentieth century revealed an intimate association between the ontogeny of blood and endothelium and led to the hypothesis of a common cell of origin termed the hemangioblast. However, the precise nature of the cellular intermediates involved in the development of both lineages from uncommitted precursors to mature cell types is still the subject of ongoing studies, as are the molecular mechanisms driving this process. There is clear evidence that lineage-restricted transcription factors play a central role in the genesis of mature lineage committed cells from multipotent progenitors. Amongst these, the basic helix-loop-helix (bHLH) family is of key importance for cell fate determination in the development of the hematopoietic system and beyond. This article will review the current evidence for the common origin of blood and endothelium, focusing on the function of the bHLH protein encoded by the stem cell leukemia (SCL) gene, and its role as a pivotal regulator of hematopoiesis and vasculogenesis.