Here, using a chemically defined human pluripotent stem cell (hPSC) differentiation system combined with the use of DLL1-Fc and the small molecule DAPT to manipulate NOTCH signaling following the emergence of the well-defined CD144+CD43−CD73− population of HE during EHT, we discover that NOTCH activation leads to the formation of arterial-type CD144+CD43−CD73−DLL4+ HE (AHE) that expresses arterial markers and possesses definitive lympho-myeloid and erythroid potentials. The gene discussed is DLL1; the disease is hereditary elliptocytosis.