Liver and pancreas initially develop by budding from the embryonic endoderm. The formation of these organs coincides with the appearance of endothelial cells (ECs) adjacent to the endoderm. ECs either develop in situ in organs, or are recruited by organs and are induced to form blood vessels. Recent reports on liver and pancreas have now shown that ECs also induce essential steps in organ formation such as morphogenesis and cell differentiation. This review summarizes reports on EC signaling during organogenesis and cell differentiation.