Formation of a properly branched vascular system during embryogenesis is crucial for embryo survival. Here we review the regulation of the morphogenesis of the arterial and venous system during embryogenesis. We show that in addition to deterministic patterning mechanisms and plasticity of endothelial cells, arterial-venous differentiation and branching morphogenesis involves a prominent role for blood flow. Based on in vivo observations of developing arteries, we identified a novel morphological event crucial for the morphogenesis of the arterial tree, disconnection of small side branches. This disconnection of side branches occurs exactly at the point of bifurcation. The rate of disconnection of side branches depends on flow velocity and branching angle. The balance between disconnection and maintenance of arterial side branches determines the number of side branches connected to a large artery. Based on these observations, we postulate that the number of pre-existing collaterals connected to a large artery is a function of the disconnection process and can be regulated by hemodynamics. We furthermore show that embryonic arteries already adapt their lumen diameter to the amount of flow carried. Taken together, we suggest that hemodynamics plays a pivotal role in shaping the arterial system. We suggest that flow-evoked remodeling processes determine the number of preexisting collaterals during critical periods of embryo–fetal development. Insight into these basic principles of arterial growth and branching during embryogenesis may aid to understanding the observed variability in the capacity to establish a collateral circulation in patients with ischemic diseases and finding new strategies for therapeutic arteriogenesis.