Sprouting angiogenesis and lymphatic-blood vessel segregation both involve the migration of endothelial cells, but the precise migratory molecules that govern the decision of blood vascular endothelial cells to segregate into lymphatic vasculature are unknown. Here, we deleted endothelial Rac1 in mice (Tie1-Cre(+);Rac1(fl/fl)) and revealed, unexpectedly, that whereas blood vessel morphology appeared normal, lymphatic-blood vessel separation was impaired, with corresponding edema, haemorrhage and embryonic lethality. Importantly, normal levels of Rac1 were essential for directed endothelial cell migratory responses to lymphatic-inductive signals. Our studies identify Rac1 as a crucial part of the migratory machinery required for endothelial cells to separate and form lymphatic vasculature.