The developing liver is vascularized through a complex process of vasculogenesis that leads to the differentiation of the sinusoids. The main structural elements of the sinusoidal wall are endothelial and stellate (Ito) cells. We have studied the differentiation of the hepatic sinusoids in avian embryos through confocal colocalization of differentiation markers, in ovo direct labeling of the liver mesothelium, induced invasion of the developing chick liver by quail proepicardial cells, and in vitro culture of chimeric aggregates. Our results show that liver mesothelial cells give rise to mesenchymal cells which intermingle between the growing hepatoblast cords and become incorporated to the sinusoidal wall, contributing to both endothelial and stellate cell populations. We have also shown that the proepicardium, a mesothelial tissue anatomically continuous with liver mesothelium, is able to form sinusoid‐like vessels into the hepatic primordium as well as in cultured aggregates of hepatoblasts. Thus, both intrinsic or extrinsic mesothelium‐derived cells have the developmental potential to contribute to the establishment of liver sinusoids. Developmental Dynamics 229:465–474, 2004. © 2004 Wiley‐Liss, Inc.