Vascular endothelial and myeloid cells have been proposed to originate from a common precursor cell, the hemangioblast. The mechanism of endothelial and myeloid cell specification and differentiation is poorly understood. We have previously described the endothelial-specific zebrafish Ets1-related protein (Etsrp), which was both necessary and sufficient to initiate vasculogenesis in the zebrafish embryos. Here we identify human Etv2/ER71 and mouse ER71 proteins as functional orthologs of Etsrp. Overexpression of mouse ER71 and Etsrp caused strong expansion of hemangioblast and vascular endothelial lineages in a zebrafish embryo. In addition, we show that etsrp is also required for the formation of myeloid but not erythroid cells. In the absence of etsrp function, the number of granulocytes and macrophages is greatly reduced. Etsrp overexpression causes expansion of both myeloid and vascular endothelial lineages. Analysis of mosaic embryos indicates that etsrp functions cell autonomously in inducing myeloid lineage. We further demonstrate that the choice of endothelial versus myeloid fate depends on a combinatorial effect of etsrp, scl, and alk8 genes.