The ETS transcription factor Etv2 is necessary and sufficient for the generation of hematopoietic and endothelial cells. However, upstream regulators of Etv2 in hemangiogenesis, generation of hematopoietic and endothelial cells, have not been clearly addressed. Here we track the developmental route of hemangiogenic progenitors from mouse embryonic stem cells, perform genome-wide CRISPR screening, and transcriptome analysis of en route cell populations by utilizing Brachyury, Etv2, or Scl reporter embryonic stem cell lines to further understand the mechanisms that control hemangiogenesis. We identify the forkhead transcription factor Foxh1, in part through Eomes, to be critical for the formation of FLK1+ mesoderm, from which the hemangiogenic fate is specified. Importantly, hemangiogenic fate is specified not simply by the onset of Etv2 expression, but by a threshold-dependent mechanism, in which VEGF-FLK1 signaling plays an instructive role by promoting Etv2 threshold expression. These studies reveal comprehensive cellular and molecular pathways governing the hemangiogenic cell lineage development.