The cardiovascular system consists of many cell types with distinct embryonic origins. Cells from an Islet1 (Isl1)-expressing progenitor population make a substantial contribution to the developing heart. We reasoned that cells derived from Isl1-expressing progenitors might contribute more widely to the cardiovascular system. We show that cells derived from an Isl1-expressing progenitor lineage make a wide contribution to the systemic vasculature and that embryos conditionally deficient for Rac1 within this cell population develop defects in the non-cardiac vasculature. These data define new roles for Isl1 in the developing embryo and demonstrate a contribution of Isl1-expressing progenitors to vascular endothelium in vivo.