Recently, blood vessels have been implicated in the morphogenesis of various organs. The vasculature is also known to be essential for endochondral bone development, yet the underlying mechanism has remained elusive. We show that a unique composition of blood vessels facilitates the role of the endothelium in bone mineralization and morphogenesis. Immunostaining and electron microscopy showed that the endothelium in developing bones lacks basement membrane, which normally isolates the blood vessel from its surroundings. Further analysis revealed the presence of collagen type I on the endothelial wall of these vessels. Because collagen type I is the main component of the osteoid, we hypothesized that the bone vasculature guides the formation of the collagenous template and consequently of the mature bone. Indeed, some of the bone vessels were found to undergo mineralization. Moreover, the vascular pattern at each embryonic stage prefigured the mineral distribution pattern observed one day later. Finally, perturbation of vascular patterning by overexpressing Vegf in osteoblasts resulted in abnormal bone morphology, supporting a role for blood vessels in bone morphogenesis. These data reveal the unique composition of the endothelium in developing bones and indicate that vascular patterning plays a role in determining bone shape by forming a template for deposition of bone matrix.