During embryonic development, the first hematopoietic stem cells (HSCs) emerge from the ventral surface of the dorsal aorta, via a process of endothelial to hematopoietic transition (EHT) at embryonic day (E) 10.5. The aorta-gonad mesonephros (AGM) region contains resident mesenchymal stem cell-like cells (MSC-LCs), but their identity and role in HSC generation are still obscure. To clarify the spatio-temporal distribution, functional hierarchy and developmental origins of cells in the AGM stroma, we used a library of compound transgenic mice, and isolated a population of PDGFRA+/Nestin-GFP (N-GFP)-/PDGFRB-/CD31- cells with MSC-LC activity in the E10.5 and E11.5 AGM. Freshly harvested MSC-LCs were adept at forming blood vessels with CD31+ luminal endothelium enveloped by PDGFRB+ pericytes, when transplanted subcutaneously into mice. Conditional ablation of PDGFRA+ or Nestin+ cells led to either complete or partial loss of MSC-LCs respectively, with severe loss of endothelial and pericyte-like cells, and concomitant loss of blood formation in the AGM. Lineage tracing studies using tamoxifen induction in PDGFRACreERT2/R26eYFP embryos showed that stromal, sub-endothelial, endothelial and long-term repopulating hematopoietic stem cells (LT-HSCs) cells in the E11.5 AGM were progeny of Mesp1+ PDGFRA cells. Mesoderm (Mesp1+) derived PDGFRA+ cells dominated the sub-endothelial and deeper ventral stroma in the AGM at E10.5 and E11.5 but were replaced by neural crest (Wnt1+) derived PDGFRA+ cells at E13.5. Re-aggregation of E11.5 Mesp1 derived MSC-LCs with E13.5 aortic or adult endothelial cells, which normally lack hemogenic capacity resulted in the generation of endothelial cell derived LT-HSCs, which was suppressed by dose-dependent inhibition of PDGF-AA/PDGFRA signalling. RNA-sequencing analysis of non-hemogenic E13.5 endothelial cells showed up-regulation of EHT, WNT, BMP and Notch signaling pathway genes when re-aggregated with E11.5 Mesp1 derived MSC-LCs. Taken together, we report that MSC-LC populations in the AGM are temporally dynamic, and that MesP1-derived MSC-LCs regulate hemogenic potential of the endothelium and that this cooperativity is dependent on PDGF-AA/PDGFRa signalling.