The initiation of de novo testis cord organization in the fetal gonad is poorly understood. Endothelial cell migration into XY gonads initiates testis morphogenesis. However, neither the signals that regulate vascularization of the gonad nor the mechanisms through which vessels affect tissue morphogenesis are known. Here, we show that Vegf signaling is required for gonad vascularization and cord morphogenesis. We establish that interstitial cells express Vegfa and respond, by proliferation, to endothelial migration. In the absence of vasculature, four-dimensional imaging of whole organs revealed that interstitial proliferation is reduced and prevents formation of wedge-like structures that partition the gonad into cord-forming domains. Antagonizing vessel maturation also reduced proliferation. However, proliferation of mesenchymal cells was rescued by the addition of PDGF-BB. These results suggest a pathway that integrates initiation of vascular development and testis cord morphogenesis, and lead to a model in which undifferentiated mesenchyme recruits blood vessels, proliferates in response, and performs a primary function in the morphogenesis and patterning of the developing organ.