Smads are intracellular mediators of transforming growth factor β (TGF-β) superfamily signaling. In this review, we focus on the genetic mouse models for Smad pathways, which have provided functional evidence regarding the complex circuitry in angiogenesis and hematopoiesis during development. In the early stages of vascular development, TGF-β signaling is a contributing factor in angiogenesis and vascular maturation. Whereas in the later embryogenesis, selected molecules of Smad pathways, such as TGF-β type II receptor (TbRII), ALK5, and Smad5, seem to be dispensable for vessel morphogenesis and integrity. TGF-β signaling is not required in the induction of hematopoietic precursors from mesoderm, but inhibits the subsequent expansion of committed hematopoietic precursors. By contrast, bone morphogenetic protein 4 (BMP4) has long been acknowledged pivotal in mesoderm induction and hematopoietic commitment during development. However, recent genetic evidence shows the BMP4-ALK3 axis is not crucial for the formation of hematopoietic cells from FLK1+ mesoderm. Because of the highly redundant mechanisms within the Smad pathways, the precise role of the Smad signaling involved in vascular and hematopoietic development remains nebulous. The generation of novel cell lineage restricted Cre transgenes would shed new light on the future relevant investigations.