In vertebrates, the first haematopoietic stem cells (HSCs) with multi-lineage and long-term repopulating potential arise in the AGM (aorta-gonad-mesonephros) region. These HSCs are generated from a rare and transient subset of endothelial cells, called haemogenic endothelium (HE), through an endothelial-to-haematopoietic transition (EHT). Here, we establish the absolute requirement of the transcriptional repressors GFI1 and GFI1B (growth factor independence 1 and 1B) in this unique trans-differentiation process. We first demonstrate that Gfi1 expression specifically defines the rare population of HE that generates emerging HSCs. We further establish that in the absence of GFI1 proteins, HSCs and haematopoietic progenitor cells are not produced in the AGM, revealing the critical requirement for GFI1 proteins in intra-embryonic EHT. Finally, we demonstrate that GFI1 proteins recruit the chromatin-modifying protein LSD1, a member of the CoREST repressive complex, to epigenetically silence the endothelial program in HE and allow the emergence of blood cells.