How cells acquire their fate is a fundamental question in developmental and regenerative biology. Multipotent progenitors undergo cell-fate restriction in response to cues from the microenvironment, the nature of which is poorly understood. In the case of the lymphatic system, venous cells from the cardinal vein are thought to generate lymphatic vessels through trans-differentiation. Here we show that in zebrafish, lymphatic progenitors arise from a previously uncharacterized niche of specialized angioblasts within the cardinal vein, which also generates arterial and venous fates. We further identify Wnt5b as a novel lymphatic inductive signal and show that it also promotes the ‘angioblast-to-lymphatic’ transition in human embryonic stem cells, suggesting that this process is evolutionarily conserved. Our results uncover a novel mechanism of lymphatic specification, and provide the first characterization of the lymphatic inductive niche. More broadly, our findings highlight the cardinal vein as a heterogeneous structure, analogous to the haematopoietic niche in the aortic floor.