Recent evidence suggests the existence of progenitor cells in adult tissues that are capable of differentiating into vascular structures as well as into all hematopoietic cell lineages. Here we describe an efficient and reproducible method for generating large numbers of these bipotential progenitors—known as hemangioblasts—from human embryonic stem (hES) cells using an in vitro differentiation system. Blast cells expressed gene signatures characteristic of hemangioblasts, and could be expanded, cryopreserved and differentiated into multiple hematopoietic lineages as well as into endothelial cells. When we injected these cells into rats with diabetes or into mice with ischemia-reperfusion injury of the retina, they localized to the site of injury in the damaged vasculature and appeared to participate in repair. Injection of the cells also reduced the mortality rate after myocardial infarction and restored blood flow in hind limb ischemia in mouse models. Our data suggest that hES-derived blast cells (hES-BCs) could be important in vascular repair.