Mammalian embryos produce several waves of hematopoietic cells before the establishment of the hematopoietic stem cell (HSC) hierarchy. These early waves of embryonic hematopoiesis present a reversed hierarchy in which hematopoietic potential is first displayed by highly specialized cells that are derived from transient uni- and bipotent progenitor cells. Hematopoiesis progresses through multilineage erythro-myeloid progenitor cells that lack self-renewal potential and, subsequently, to make distinct lymphoid progenitor cells before culminating in detectable definitive HSC. This review provides an overview of the stepwise development of embryonic hematopoiesis. We focus on recent progress in demonstrating that lymphoid lineages emerge from hemogenic endothelial cells before the presence of definitive HSC activity and discuss the implications of these findings.