The Notch signaling pathway is essential for embryonic vascular development in vertebrates. Here we show that mouse embryos heterozygous for a targeted mutation in the gene encoding the DLL4 ligand exhibit haploinsufficient lethality because of defects in vascular remodeling. We also describe vascular defects in embryos homozygous for a mutation in the Rbpsuh gene, which encodes the primary transcriptional mediator of Notch signaling. Conditional inactivation of Rpbsuh function demonstrates that Notch activation is essential in the endothelial cell lineage. Notch pathway mutant embryos exhibit defects in arterial specification of nascent blood vessels and develop arteriovenous malformations. These results demonstrate that vascular remodeling in the mouse embryo is sensitive to Dll4 gene dosage and that Notch activation in endothelial cells is essential for embryonic vascular remodeling.