The stem cell leukaemia gene (Scl) encodes a basic helix-loop-helix transcription factor with a pivotal role in both haematopoiesis and endothelial development. During mouse development, Scl is first expressed in extra-embryonic mesoderm, and is required for the generation of all haematopoietic lineages and normal yolk sac angiogenesis. Ectopic expression of Scl during zebrafish development specifies haemangioblast formation from early mesoderm. These results suggest that SCL is essential for establishing the transcriptional programme responsible for the formation of haematopoietic stem cells and have focused attention on the transcriptional regulation of Scl itself. Previous studies have identified a panel of Scl enhancers each of which directed expression to a subdomain of the normal Scl expression pattern. Among them, a 3′ enhancer directed expression during development to vascular endothelium and haematopoietic progenitors but not to Ter119+ erythroid cells. The expression in haematopoietic stem cells, however, remained undetermined. We demonstrate that this 3′ enhancer directs lacZ expression in transgenic mice to most foetal and adult long-term repopulating haematopoietic stem cells, and therefore functions as a stem cell enhancer. Consistent with these results, expression in Scl–/– embryos of exogenous Scl driven by the stem cell enhancer rescued the formation of early haematopoietic progenitors and also resulted in normal yolk sac angiogenesis. By contrast, erythropoiesis remained markedly deficient in rescued embryos. This observation is consistent with the inactivity of the stem cell enhancer in erythroid cells and reveals an essential role for SCL during erythroid differentiation in vivo.