During embryonic development, adult haematopoietic stem cells (HSCs) emerge preferentially in the ventral domain of the aorta in the aorta–gonad–mesonephros (AGM)region. Several signalling pathways such as Notch, Wnt, Shh and RA are implicated in this process, yet how these interact to regulate the emergence of HSCs has not previously been described in mammals. Using a combination of ex vivo and in vivo approaches, we report here that stage-specific reciprocal dorso–ventral inductive interactions and lateral input from the urogenital ridges are required to drive HSC development in the aorta. Our study strongly suggests that these inductive interactions in the AGM region are mediated by the interplay between spatially polarized signalling pathways. Specifically, Shh produced in the dorsal region of the AGM, stem cell factor in the ventral and lateral regions, and BMP inhibitory signals in the ventral tissue are integral parts of the regulatory system involved in the development of HSCs.