Initial events involved in the process of heart formation consist of myocardial differentiation as well as development of endothelial and endocardial tissues. As only limited means are allocated to the studying of cardiovascular system development, embryonic stem cells (ESCs) isolated from the inner cell mass (ICM) of developing mice or human blastocysts offer the first step toward the understanding of these complex and intriguing events. ESCs are able to differentiate into a wide range of cell types, including various vascular cells and cardiomyocytes, and their self-renewal capability renders them a unique, homogeneous, and unlimited preliminary population of cells for the investigation of early developmental events of cardiovascular system and lineage commitment. This review summarizes the accumulated knowledge of the cellular and molecular mechanisms involved in the development of the cardiovascular system. Anat Rec Part A 276A:58–65, 2004. © 2004 Wiley-Liss, Inc.