Vezf1 is an early development gene that encodes a zinc finger transcription factor. In the developing embryo, Vezf1 is expressed in the yolk sac mesoderm and the endothelium of the developing vasculature and, in addition, in mesodermal and neuronal tissues. Targeted inactivation of Vezf1 in mice reveals that it acts in a closely regulated, dose-dependent fashion on the development of the blood vascular and lymphatic system. Homozygous mutant embryos display vascular remodeling defects and loss of vascular integrity leading to localized hemorrhaging. Ultrastructural analysis shows defective endothelial cell adhesion and tight junction formation in the mutant vessels. Moreover, in heterozygous embryos, haploinsufficiency is observed that is characterized by lymphatic hypervascularization associated with hemorrhaging and edema in the jugular region; a phenotype reminiscent of the human congenital lymphatic malformation syndrome cystic hygroma.