Vascular smooth muscle cells (VSMC) have been suggested to arise from various developmental sources during embryogenesis, depending on the vascular bed. However, evidence also points to a common subpopulation of vascular progenitor cells predisposed to VSMC fate in the embryo. In the present study, we use binary transgenic reporter mice to identify a Tie1+CD31dimvascular endothelial (VE)-cadherin–CD45– precursor that gives rise to VSMC in vivo in all vascular beds examined. This precursor does not represent a mature endothelial cell, because a VE-cadherin promoter-driven reporter shows no expression in VSMC during murine development. Blockade of Notch signaling in the Tie1+ precursor cell, but not the VE-cadherin+ endothelial cell, decreases VSMC investment of developing arteries, leading to localized hemorrhage in the embryo at the time of vascular maturation. However, Notch signaling is not required in the Tie1+ precursor after establishment of a stable artery. Thus, Notch activity is required in the differentiation of a Tie1+ local precursor to VSMC in a spatiotemporal fashion across all vascular beds.