LIM-homeobox genes play multiple roles in developmental processes, but their roles in gonad development are not completely understood. Herein, we report that Lhx2, Ils2, Lmx1a, and Lmx1b are expressed in a sexually dimorphic manner in mouse, rat, and human gonads during sex determination. Amongst these, Lhx2 has female biased expression in the developing gonads of species with environmental and genetic modes of sex determination. Single-cell RNAseq analysis revealed that Lhx2 is exclusively expressed in the germ cells of the developing mouse ovaries. To elucidate the roles of Lhx2 in the germ cells, we analyzed the phenotypes of Lhx2 knockout XX gonads. While the gonads developed appropriately in Lhx2 knockout mice and the somatic cells were correctly specified in the developing ovaries, transcriptome analysis revealed enrichment of genes in the angiogenesis pathway. There was an elevated expression of several pro-angiogenic factors in the Lhx2 knockout ovaries. The elevated expression of pro-angiogenic factors was associated with an increase in numbers of endothelial cells in the Lhx2-/- ovaries at E13.5. Gonad recombination assays revealed that the increased numbers of endothelial cells in the XX gonads in absence of Lhx2 was due to ectopic migration of endothelial cells in a cell non-autonomous manner. We also found that, there was increased expression of several endothelial cell-enriched male-biased genes in Lhx2 knockout ovaries. Also, in absence of Lhx2, the migrated endothelial cells formed an angiogenic network similar to that of the wild type testis, although the coelomic blood vessel did not form. Together, our results suggest that Lhx2 in the germ cells is required to suppress vascularization in the developing ovary. These results suggest a need to explore the roles of germ cells in the control of vascularization in developing gonads.