Background: ADAM17/TACE activity is important during embryonic development. We wished to investigate possible roles of this metalloprotease, focusing on vascular development.Methodology/principal Findings: Mice mutant in the enzymatic activity of ADAM17 were examined at various stages of embryonic development for vascular pattern and integrity using markers for vessel wall cells. We observed hemorrhage and edema starting at embryonic day E14.5 and becoming more severe as development proceeded; prior to embryonic day E14.5, embryos appeared normal. Staining for PECAM-1/CD31 revealed abnormalities in the patterns of branching of the embryonic vasculature at E14.5.Conclusions/significance: These abnormalities preceded association of pericytes or monocyte/macrophage cells with the affected vessels and, therefore, presumably arise from defects in endothelial function consequent upon failure of ADAM17 to cleave one or more substrates involved in vascular development, such as Notch, Delta, VEGFR2 or JAM-A. Our study demonstrates a role for ADAM17 in modulating embryonic vessel development and function.