The embryonic endothelium is a known source of hematopoietic stem cells. Moreover, vessel-associated progenitors/stem cells with multilineage mesodermal differentiation potential, such as the ‘embryonic mesoangioblasts’, originate in vitro from the endothelium. Using a genetic lineage tracing approach, we show that early extra-embryonic endothelium generates, in a narrow time-window and prior to the hemogenic endothelium in the major embryonic arteries, hematopoietic cells that migrate to the embryo proper, and are subsequently found within the mesenchyme. A subpopulation of these cells, distinct from embryonic macrophages, co-expresses mesenchymal and hematopoietic markers. In addition, hemogenic endothelium-derived cells contribute to skeletal and smooth muscle, and to other mesodermal cells in vivo, and display features of embryonic mesoangioblasts in vitro. Therefore, we provide new insights on the distinctive characteristics of the extra-embryonic and embryonic hemogenic endothelium, and we identify the putative in vivo counterpart of embryonic mesoangioblasts, suggesting their identity and developmental ontogeny.