Delta-like 4 (Dll4) is a transmembrane ligand for Notch receptors that is expressed in arterial blood vessels and sprouting endothelial cells. Here we show that Dll4 regulates vessel branching during development by inhibiting endothelial tip cell formation. Heterozygous deletion of dll4 or pharmacological inhibition of Notch signaling using γ-secretase inhibitor revealed a striking vascular phenotype, with greatly increased numbers of filopodia-extending endothelial tip cells and increased expression of tip cell marker genes compared with controls. Filopodia extension in dll4^+/− retinal vessels required the vascular growth factor VEGF and was inhibited when VEGF signaling was blocked. Although VEGF expression was not significantly altered in dll4^+/− retinas, dll4^+/− vessels showed increased expression of VEGF receptor 2 and decreased expression of VEGF receptor 1 compared with wild-type, suggesting they could be more responsive to VEGF stimulation. In addition, expression of dll4 in wild-type tip cells was itself decreased when VEGF signaling was blocked, indicating that dll4 may act downstream of VEGF as a “brake” on VEGF-mediated angiogenic sprouting. Taken together, these data reveal Dll4 as a negative regulator of vascular sprouting and vessel branching that is required for normal vascular network formation during development.