Thalidomide is a potent teratogen that induces a range of birth defects, most commonly of the developing limbs. The mechanisms underpinning the teratogenic effects of thalidomide are unclear. Here we demonstrate that loss of immature blood vessels is the primary cause of thalidomide-induced teratogenesis and provide an explanation for its action at the cell biological level. Antiangiogenic but not antiinflammatory metabolites/analogues of thalidomide induce chick limb defects. Both in vitro and in vivo, outgrowth and remodeling of more mature blood vessels is blocked temporarily, whereas newly formed, rapidly developing, angiogenic vessels are lost. Such vessel loss occurs upstream of changes in limb morphogenesis and gene expression and, depending on the timing of drug application, results in either embryonic death or developmental defects. These results explain both the timing and relative tissue specificity of thalidomide embryopathy and have significant implications for its use as a therapeutic agent.