Vascular endothelial (VE)-cadherin is an adhesive transmembrane protein specifically expressed at interendothelial junctions. Its extracellular domain exhibits Ca2+-dependent homophilic reactivity, promoting cell-cell recognition. Mice deficient in VE-cadherin die at mid-gestation resulting from severe vascular defects. At the early phases of vascular development (E8.5) of VE-cadherin-deficient embryos, in situ differentiation of endothelial cells was delayed although their differentiation program appeared normal. Vascularization was defective in the anterior part of the embryo, while dorsal aortae and vitelline and umbilical arteries formed normally in the caudal part. At E9.25, organization of endothelial cells into large vessels was incomplete and angiogenesis was impaired in mutant embryos. Defects were more severe in extraembryonic vasculature. Blood islands of the yolk sac and clusters of angioblasts in allantois failed to establish a capillary plexus and remained isolated. This was not due to defective cell-cell recognition as endothelial cells formed intercellular junctions, as shown by electron microscopy. These data indicate that VE-cadherin is dispensable for endothelial homophilic adhesion but is required for vascular morphogenesis.