The totipotent mouse embryonic stem (ES) cell is known to differentiate into cells expressing the beta-globin gene when stimulated with bone morphogenetic protein (BMP)-4. Here, we demonstrate that BMP-4 is essential for generating both erythro-myeloid colony-forming cells (CFCs) and lymphoid (B and NK) progenitor cells from ES cells and that vascular endothelial growth factor (VEGF) synergizes with BMP-4. The CD45(+) myelomonocytic progenitors and Ter119(+) erythroid cells began to be detected with 0.5 ng/mL BMP-4, and their levels plateaued at approximately 2 ng/mL. VEGF alone weakly elevated the CD34(+) cell population though no lymphohematopoietic progenitors were induced. However, when combined with BMP-4, 2 to 20 ng/mL VEGF synergistically augmented the BMP-4-dependent generation of erythro-myeloid CFCs and lymphoid progenitors from ES cells, which were enriched in CD34(+) CD31(lo) and CD34(+) CD45(-)cell populations, respectively, in a dose-dependent manner. Furthermore, during the 7 days of in vitro differentiation, BMP-4 was required within the first 4 days, whereas VEGF was functional after the action of BMP-4 (in the last 3 days). Thus, VEGF is a synergistic enhancer for the BMP-4-dependent differentiation processes, and it seems to be achieved by the ordered action of the 2 factors.