Vascular development begins with formation of a primary capillary plexus that is later remodeled to give rise to the definitive vasculature. Although the mechanism by which arterial and venous fates are acquired is well understood, little is known about when during vascular development arterial and venous vessels emerge and how their growth is regulated. Previously, we have demonstrated that a hedgehog (HH)/vascular endothelial growth factor(VEGF) and angiopoeitin 2 (ANG2) signaling pathway is essential for the development of the coronary vasculature. Here, we use conditional gene targeting to identify the cell types that receive HH signaling and mediate coronary vascular development. We show that HH signaling to the cardiomyoblast is required for the development of coronary veins, while HH signaling to the perivascular cell (PVC) is necessary for coronary arterial growth. Moreover,the cardiomyoblast and PVC appear to be the exclusive cell types that receive HH signals, as ablation of HH signaling in both cell types leads to an arrest in coronary development. Finally, we present evidence suggesting that coronary arteries and veins may be derived from distinct lineages.