Stromal-cell-derived factor-1 (SDF-1), the only ligand of the chemokine receptor CXCR4, is involved in skeletal muscle development. However, its role in the proliferation, differentiation and migration of somite cells is not well understood. Here, we investigated its function during somite development in chicken embryos by using gain-of-function and loss-of-function experiments. Overexpression of SDF-1 was performed by electroporating SDF-1 constructs into the ventrolateral part of the somite, or by injecting SDF-1-expressing cells into the somites of stages HH14-16 chicken embryos. We found that enhanced SDF-1 signaling induced cell proliferation in the somite. This resulted in an increase in number of both myotomal and endothelial cells. In contrast, inhibition of SDF-1/CXCR4 signaling led to a reduction of myotomal cells. Injection of SDF-1 producing cells into the somite induced ectopic localization of myotomal cells in the sclerotome. Although many SDF-1-expressing somite cells colonized the limb, only a few of them developed into muscle cells. This resulted in a reduction of the limb muscle mass. This means that most myogenic progenitors were stopped on their migration towards the limb due to the high concentration of the SDF-1 signal in the somite. Most of the SDF-1-expressing somite cells found in the limb were of endothelial cell fate and they contributed to the increase in limb blood vessels. These results reveal that SDF-1 promotes the proliferation of both myogenic and angiogenic progenitor cells of the somite and controls myotome formation. Furthermore, SDF-1 controls muscle and blood vessel formation in the limb in different ways.