In embryonic stem cells, Oct-4 concentration is critical in determining the development of endoderm, mesoderm, and trophectoderm. Although Oct-4 expression is essential for mesoderm development, it is unclear whether it has a role in the development of specific mesodermal tissues. In this study, we have examined the importance of Oct-4 in the generation of hematopoietic cells using an inducible Oct-4 ESC line. We demonstrate that Oct-4 has a role in supporting hematopoiesis after specifying brachyury-positive mesoderm. When we suppressed Oct-4 expression before or after mesoderm specification, no hematopoietic cells are detected. However, hematopoiesis can be rescued in the absence of Oct-4 after mesoderm specification if the essential hematopoietic transcription factor stem cell leukemia is expressed. Our results suggest that, for hematopoiesis to occur, Oct-4 is required for the initial specification of mesoderm and subsequently is required for the development of hematopoietic cells from uncommitted mesoderm.