Signaling by vascular endothelial growth factors (VEGFs) through VEGF receptors (VEGFRs) plays important roles in vascular development and hematopoiesis. The authors analyzed the function of VEGF-C signaling through both VEGFR-2 and VEGFR-3 in vasculoangiogenesis and hematopoiesis using a coculture of para-aortic splanchnopleural mesoderm (P-Sp) explants from mouse embryos with stromal cells (OP9). Vasculogenesis and angiogenesis were evaluated by the extent of vascular bed and network formation, respectively. Addition of VEGF-C to the P-Sp culture enhanced vascular bed formation and suppressed definitive hematopoiesis. Both vascular bed and network formations were completely suppressed by addition of soluble VEGFR-1-Fc competitor protein. Formation of vascular beds but not networks could be rescued by VEGF-C in the presence of the competitor, while both were rescued by VEGF-A. VEGFR-3-deficient embryos show the abnormal vasculature and severe anemia. Consistent with these in vivo findings, vascular bed formation in the P-Sp from the VEGFR-3-deficient embryos was enhanced to that in wild-type or heterozygous embryos, and hematopoiesis was severely suppressed. When VEGFR-3-Fc chimeric protein was added to trap endogenous VEGF-C in the P-Sp culture of the VEGFR-3-deficient embryos, vascular bed formation was suppressed and hematopoiesis was partially rescued. These results demonstrate that because VEGF-C signaling through VEGFR-2 works synergistically with VEGF-A, the binding of VEGF-C to VEGFR-3 consequently regulates VEGFR-2 signaling. In VEGFR-3-deficient embryos, an excess of VEGF-C signals through VEGFR-2 induced the disturbance of vasculogenesis and hematopoiesis during embryogenesis. This indicates that elaborated control through VEGFR-3 signaling is critical in vasculoangiogenesis and hematopoiesis. (Blood. 2000;96:3793-3800)