The hemangioblast is a multipotential progenitor, which is derived from the mesoderm and can further differentiate into hematopoietic and endothelial lineages. The molecular mechanism governing the specification of hemangioblasts is fundamental to regenerative medicine based on embryonic stem cells for the treatment of various hematologic and vascular diseases. Here we show that aggf1 acts at the top of the genetic regulatory hierarchy in the specification of hemangioblasts in zebrafish. Knockdown of aggf1 expression decreases expression of endothelial cell-specific markers (cdh5, admr) and disrupts primitive hematopoiesis as shown by a decreased number of erythroid cells and reduced expression of gata1 (marker for erythroid progenitors) and pu.1 (myeloid progenitors). Aggf1 knockdown also decreases expression of runx1 and c-myb, indicating that it is required for specification of hematopoietic stem cells (definitive hematopoiesis). Aggf1 knockdown led to dramatically reduced expression of hemangioblast markers fli1, etsrp, lmo2, and scl, and hematopoietic/endothelial defects in aggf1 morphants were rescued by messenger RNA for scl, fli-vp16, or etsrp. Taken together, these data indicate that aggf1 is involved in differentiation of both hematopoietic and endothelial lineages and that aggf1 acts upstream of scl, fli1, and etsrp in specification of hemangioblasts.