CXC chemokine ligand 12 (CXCL12; stromal cell-derived factor-1 [SDF-1]/pre-B-cell growth-stimulating factor [PBSF]) and its receptor CXCR4 are essential for vascularization in the gastrointestinal tract as well as B lymphopoiesis and colonization of bone marrow by hematopoietic cells. However, the mechanism by which CXCL12/CXCR4 functions in blood vessel formation remains elusive. Here, we have found a novel mode of organ vascularization and determined the roles of CXCL12 in these processes. In the developing small intestine, many short interconnecting vessels form between larger superior mesenteric artery (SMA) and the neighboring primary capillary plexus surrounding the primitive gut, and they elongate and become the arteries supplying the small intestine. Mice lacking CXCL12 or CXCR4 lack the interconnecting vessels but have normal venous networks. The mutants lack filopodial extension and intussusception from endothelial cells of SMAs seen in wild-type embryos. CXCR4 is specifically expressed in arteries in the developing mesenteries and its expression is severely reduced in CXCL12^–/– embryos. Mice in which CXCR4 is specifically deleted in the endothelium reveal vascular defects identical to those observed in the conventional CXCR4^–/– embryos. Together, CXCL12 acts on arterial endothelial cells of SMA to up-regulate CXCR4 and mediate the connection between the larger artery and neighboring capillary plexus in an organ-specific manner.