Vessel formation in the lung has been described as occurring by two mechanisms: proximal, or branch, pulmonary arteries develop via angiogenesis; and distal, smaller vessels form by vasculogenesis. Connections between the proximal and distal vessels establish the final vascular network. The preponderance of vessel formation has been suspected to occur during the canalicular stage of lung development. To test these hypotheses, reporter gene expression under control of the regulatory domain of fetal liver kinase-1 (flk), an early endothelial cell-specific marker, was used to evaluate mouse lungs from embryonic day 10.5 (E10.5) through 2 wk postnatal age. Morphologic assessment was performed after histochemical staining, and quantification of vessel development by a chemiluminescent assay was compared with overall embryonic lung growth. LacZ expression under flk promoter control allowed: (1) early identification of differentiating endothelial cells of the branch pulmonary arteries; (2) visualization of distal vessels forming in the lung mesenchyme (primary capillary network) with subsequent remodeling; (3) recognition of early continuity between proximal and distal vessels, occurring by E10.5; and (4) assessment of developing pulmonary veins and venous confluence. Quantitative analysis revealed increased flk regulated beta-galactosidase (beta-gal) activity of 12 ng beta-gal/lung at E12.5 to 3,215 ng beta-gal/lung at 2 wk, which corresponded to overall lung growth during this period as shown by an increase in total protein content per lung from 35 microg at E12.5 to 6,456 microg at 2 wk after birth. We identified endothelial cell precursors of the developing pulmonary vasculature before vessel lumen formation. Continuity between the proximal pulmonary artery and vessels forming in the distal mesenchyme was present even at the earliest stage evaluated, suggesting endothelial cell differentiation at the site of vessel formation (i.e., vasculogenesis) as occurs with development of the aorta. Finally, we demonstrated that lung vessel development was not accentuated during the canalicular stage, but occurred at all stages and directly corresponded to overall lung growth.