Hematopoietic stem cells (HSCs) are essential for homeostasis and injury-induced regeneration of the vertebrate blood system. Although HSC transplantations constitute the most common type of stem cell therapy applied in the clinic, we know relatively little about the molecular programming of HSCs during vertebrate embryogenesis. In vertebrate embryos, HSCs form in close association with the ventral wall of the dorsal aorta. We have shown previously that in zebrafish, HSC formation depends on the presence of a signaling cascade that involves Hedgehog, vascular endothelial growth factor, and Notch signaling. Here, we reveal that Hey2, a hairy/enhancer-of-split-related basic helix-loop-helix transcription factor often believed to act downstream of Notch, is also required for HSC formation. In dorsal aorta progenitors, Hey2 expression is induced downstream of cloche and the transcription factor Scl/Tal1, and is maintained by Hedgehog and vascular endothelial growth factor signaling. Whereas knockdown of Hey2 expression results in a loss of Notch receptor expression in dorsal aorta angioblasts, activation of Notch signaling in hey2 morphants rescues HSC formation in zebrafish embryos. These results establish an essential role for Hey2 upstream of Notch in HSC formation.