The vertebrate circulatory system is composed of arteries and veins. The functional and pathological differences between these vessels have been assumed to reflect physiological differences such as oxygenation and blood pressure. Here we show that ephrin-B2, an Eph family transmembrane ligand, marks arterial but not venous endothelial cells from the onset of angiogenesis. Conversely, Eph-B4, a receptor for ephrin-B2, marks veins but not arteries. ephrin-B2 knockout mice display defects in angiogenesis by both arteries and veins in the capillary networks of the head and yolk sac as well as in myocardial trabeculation. These results provide evidence that differences between arteries and veins are in part genetically determined and suggest that reciprocal signaling between these two types of vessels is crucial for morphogenesis of the capillary beds.