Intracranial hemorrhage in preterm neonates may result in neonatal mortality and functional disabilities, but its pathogenic mechanisms are poorly defined and better therapies are needed. We used a tetracycline-regulated transgenic system to test whether the induction of vascular endothelial growth factor (VEGF) in the germinal matrix leads to intracranial hemorrhage. This genetic strategy initially induced a dense network of loosely adjoined endothelial cells and pericytes near lateral ventricles, similar to the immature vascular rete in human fetal brains. Yet, this rich vascular network transformed into low-vasculature patches correlated with hemorrhage and caspase-3 activation near birth. Gene expression and biochemical analyses suggested that downstream mediators of VEGF in this network include transcriptional factors ETS1 and HIF2α (hypoxia-inducible factor 2α), components of the PDGFβ (platelet-derived growth factor β) and TGFβ (transforming growth factor–β) receptor signaling pathways, matrix metalloproteinase-9 (MMP-9), and cathepsins. Prenatal administration of glucocorticoids markedly reduced mortality and cerebral hemorrhage in mutant animals, as in human neonates. This protective effect was not due to blocking vasculogenesis, but was instead associated with inhibition of neurovascular proteases, notably MMP-9, cathepsin B, and caspase-3. Collectively, these results support a causative role of VEGF in perinatal cerebral hemorrhage and implicate its downstream proteases as potential therapeutic targets.