The first haematopoietic stem cells (HSCs) appear in the aorta-gonad-mesonephros (AGM) region, major vitelline and umbilical vessels, and placenta; however, whether they arise locally or from immigrant yolk sac precursor cells remains unclear. This issue is best addressed by measuring cell-lineage relationships rather than cell potentials. To undertake long-term in vivo tracing of yolk sac cells, we designed a non-invasive pulse-labelling system based on Cre/loxP recombination. Here we show that in Runx1(+/-) (runt-related transcription factor 1) heterozygous mice, yolk sac cells expressing Runx1 at embryonic day 7.5 develop into fetal lymphoid progenitors and adult HSCs. During mid-gestation the labelled (embryonic day 7.5) yolk sac cells colonize the umbilical cord, the AGM region and subsequently the embryonic liver. This raises the possibility that some HSCs associated with major embryonic vasculature are derived from yolk sac precursors. We observed virtually no contribution of the labelled cells towards the yolk sac vasculature, indicating early segregation of endothelial and haematopoietic lineages.