Molecular mechanisms that regulate the generation of hematopoietic and endothelial cells from mesoderm are poorly understood. To define the underlying mechanisms, we compared gene expression profiles between embryonic stem (ES) cell-derived hemangioblasts (Blast-Colony-Forming Cells, BL-CFCs)and their differentiated progeny, Blast cells. Bioinformatic analysis indicated that BL-CFCs resembled other stem cell populations. A role for Gata2, one of the BL-CFC-enriched transcripts, was further characterized by utilizing the in vitro model of ES cell differentiation. Our studies revealed that Gata2 was a direct target of BMP4 and that enforced GATA2 expression upregulated Bmp4, Flk1 and Scl. Conditional GATA2 induction resulted in a temporal-sensitive increase in hemangioblast generation, precocious commitment to erythroid fate, and increased endothelial cell generation. GATA2 additionally conferred a proliferative signal to primitive erythroid progenitors. Collectively, we provide compelling evidence that GATA2 plays specific, contextual roles in the generation of Flk-1⁺ mesoderm, the Flk-1⁺Scl⁺hemangioblast, primitive erythroid and endothelial cells.