Blood and vascular cells are generated during early embryogenesis from a common precursor, the hemangioblast. The stem cell leukemia gene (SCL/tal 1) encodes a basic helix-loop-helix transcription factor that is essential for the normal development of blood progenitors and blood vessels. We have previously characterized a panel of SCL enhancers including the +19 element, which directs expression to hematopoietic stem cells and endothelium. Here we demonstrate that SCL is expressed in bone primordia during embryonic development and in adult osteoblasts. Despite consistent expression in cells of the osteogenic lineage, SCL protein is not required for bone specification of embryonic stem cells. In transgenic mice, the SCL +19 core enhancer directed reporter gene expression to vascular smooth muscle and bone in addition to blood and endothelium. A 644-bp fragment containing the SCL +19 core enhancer was active in both blood and bone cell lines and was bound in vivo by a common array of Ets and GATA transcription factors. Taken together with the recent observation that a common progenitor can give rise to blood and bone cells, our results suggest that the SCL +19 enhancer targets a mesodermal progenitor capable of generating hematopoietic, vascular, and osteoblastic progeny.