The developmental origin of blood-forming hematopoietic stem cells (HSCs) is a longstanding question. Here, our non-invasive genetic lineage tracing in mouse embryos pinpoints that artery endothelial cells generate HSCs. Arteries are transiently competent to generate HSCs for 2.5 days (∼E8.5-E11) but subsequently cease, delimiting a narrow time frame for HSC formation in vivo. Guided by the arterial origins of blood, we efficiently and rapidly differentiate human pluripotent stem cells (hPSCs) into posterior primitive streak, lateral mesoderm, artery endothelium, hemogenic endothelium, and >90% pure hematopoietic progenitors within 10 days. hPSC-derived hematopoietic progenitors generate T, B, NK, erythroid, and myeloid cells in vitro and, critically, express hallmark HSC transcription factors HLF and HOXA5-HOXA10, which were previously challenging to upregulate. We differentiated hPSCs into highly enriched HLF+ HOXA+ hematopoietic progenitors with near-stoichiometric efficiency by blocking formation of unwanted lineages at each differentiation step. hPSC-derived HLF+ HOXA+ hematopoietic progenitors could avail both basic research and cellular therapies.