To determine the role of vascular endothelial growth factor (Vegf) in embryonic erythroid development we have deleted or overexpressed Vegf specifically in the erythroid lineage using the EpoR-iCre transgenic line in combination with Cre/ loxP conditional gain and loss of function Vegf alleles. ROSA26 promoter-based expression of the Vegf164 isoform in the early erythroid lineage resulted in a differentiation block of primitive erythroid progenitor (EryP) development and a partial block in definitive erythropoiesis between the erythroid burst-forming unit and erythroid colony-forming unit stages. Decreased mRNA expression levels of the key erythroid transcription factor Gata1 were causally linked to this phenotype. Conditional deletion of Vegf within the erythroid lineage was associated with increased Gata1 levels and increased erythroid differentiation. Expression of a ROSA26-based GATA2 transgene rescued Gata1 mRNA levels and target genes and restored erythroid differentiation in our Vegf gain of function model. These results demonstrate that Vegf modulates Gata1 expression levels in vivo and provides new molecular insight into Vegf's ability to modulate erythropoiesis. © 2010 by The American Society of Hematology.