Using the Cre/loxP system we conditionally inactivated β-catenin in endothelial cells. We found that early phases of vasculogenesis and angiogenesis were not affected in mutant embryos; however, vascular patterning in the head, vitelline, umbilical vessels, and the placenta was altered. In addition, in many regions, the vascular lumen was irregular with the formation of lacunae at bifurcations, vessels were frequently hemorrhagic, and fluid extravasation in the pericardial cavity was observed. Cultured β-catenin −/− endothelial cells showed a different organization of intercellular junctions with a decrease in α-catenin in favor of desmoplakin and marked changes in actin cytoskeleton. These changes paralleled a decrease in cell–cell adhesion strength and an increase in paracellular permeability. We conclude that in vivo, the absence of β-catenin significantly reduces the capacity of endothelial cells to maintain intercellular contacts. This may become more marked when the vessels are exposed to high or turbulent flow, such as at bifurcations or in the beating heart, leading to fluid leakage or hemorrhages.