Vascular development is believed to occur first by vasculogenesis followed by angiogenesis. Though angiogenesis is the formation of new vessels, we found that vascular density actually decreases during this second stage. The onset of the decrease coincided with the entry of erythroblasts into circulation. We therefore measured the level of shear stress at various developmental stages and found that it was inversely proportional to vascular density. To investigate whether shear stress was inhibitory to angiogenesis, we altered shear stress levels either by preventing erythroblasts from entering circulation ("low" shear stress) or by injection of a starch solution to increase the blood plasma viscosity ("high" shear stress). By time-lapse microscopy, we show that reverse intussusception (merging of two vessels) is inversely proportional to the level of shear stress. We also found that angiogenesis (both sprouting and splitting) was inversely proportional to shear stress levels. These effects were specific to the arterial or venous plexus however, such that the effect on reverse intussusception was present only in the arterial plexus and the effect on sprouting only in the venous plexus. We cultured embryos under altered shear stress in the presence of either DAPT, a Notch inhibitor, or DMH1, an inhibitor of the bone morphogenetic protein (BMP) pathway. DAPT treatment phenocopied the inhibition of erythroblast circulation ("low" shear stress) and the effect of DAPT treatment could be partially rescued by injection of starch. Inhibition of the BMP signaling prevented the reduction in vascular density that was observed when starch was injected to increase shear stress levels.