Dep1 is a transmembrane protein-tyrosine phosphatase (PTP) that is expressed in vascular endothelial cells and has tumor suppressor activity. Mouse models with gene targeted Dep1 either show vascular defects, or do not show any defects at all. We used the zebrafish to investigate the role of Dep1 in early development. The zebrafish genome encodes two highly homologous Dep1 genes, Dep1a and Dep1b. Morpholinos specific for Dep1a and Dep1b induced defects in vasculature, resulting in defective blood circulation. However, Green Fluorescent Protein expression in fli1a::gfp1 transgenic embryos and cdh5 expression, markers of vascular endothelial cells, were normal upon Dep1a- and Dep1b-MO injection. Molecular markers indicated that arterial specification was reduced and venous markers were expanded in Dep1 morphants. Moreover, the Dep1a/Dep1b knockdowns were rescued by inhibition of Phosphatidylinositol-3 kinase (PI3K) and by expression of active Notch and Grl/Hey2. Our results suggest a model in which Dep1 acts upstream in a signaling pathway inhibiting PI3K, resulting in expression of Notch and Grl, thus regulating arterial specification in development.