Inactivation of the tumor suppressor kinase Lkb1 in mice leads to vascular defects and midgestational lethality at embryonic day 9-11 (E9-E11). Here, we have used conditional targeting to investigate the defects underlying the Lkb1^-/- phenotype. Endothelium-restricted deletion of Lkb1 led to embryonic death at E12.5 with a loss of vascular smooth muscle cells (vSMCs) and vascular disruption. Transforming growth factor beta(TGFβ) pathway activity was reduced in Lkb1-deficient endothelial cells (ECs), and TGFβ signaling from Lkb1^-/- ECs to adjacent mesenchyme was defective, noted as reduced SMAD2 phosphorylation. The addition of TGFβ to mutant yolk sac explants rescued the loss of vSMCs, as evidenced by smooth muscle alpha actin(SMA) expression. These results reveal an essential function for endothelial Lkb1 in TGFβ-mediated vSMC recruitment during angiogenesis.