Angioblasts are multipotent progenitor cells that give rise to arteries or veins [1]. Genetic disruption of the gridlock gene perturbs the artery/vein balance, resulting in generation of insufficient numbers of arterial cells [2]. However, within angioblasts the precise biochemical signals that determine the artery/vein cell-fate decision are poorly understood. We have identified by chemical screening two classes of compounds that compensate for a mutation in the gridlock gene [3]. Both target the VEGF signaling pathway and reveal two downstream branches emanating from the VEGF receptor with opposing effects on arterial specification. We show that activation of ERK (p42/44 MAP kinase) is a specific marker of early arterial progenitors and is among the earliest known determinants of arterial specification. In embryos, cells fated to contribute to arteries express high levels of activated ERK, whereas cells fated to contribute to veins do not. Inhibiting the phosphatidylinositol-3 kinase (PI3K) branch with GS4898 or known PI3K inhibitors, or by expression of a dominant-negative form of AKT promotes arterial specification. Conversely, inhibition of the ERK branch blocks arterial specification, and expression of constitutively active AKT promotes venous specification. In summary, chemical genetic analysis has uncovered unanticipated opposing roles of PI3K and ERK in artery/vein specification.