Abstract In vitro generation and expansion of hematopoietic stem cells (HSCs) holds great promise for the treatment of any ailment that relies on bone marrow or blood transplantation. To achieve this, it is essential to resolve the molecular and cellular pathways that govern HSC formation in the embryo. HSCs first emerge in the aorta-gonad-mesonephros (AGM) region, where a rare subset of endothelial cells, hemogenic endothelium (HE), undergoes an endothelial-to-hematopoietic transition (EHT). Here, we present full-length single-cell RNA sequencing (scRNA-seq) of the EHT process with a focus on HE and dorsal aorta niche cells. By using Runx1b and Gfi1/1b transgenic reporter mouse models to isolate HE, we uncovered that the pre-HE to HE continuum is specifically marked by angiotensin-I converting enzyme (ACE) expression. We established that HE cells begin to enter the cell cycle near the time of EHT initiation when their morphology still resembles endothelial cells. We further demonstrated that RUNX1 AGM niche cells consist of vascular smooth muscle cells and PDGFRa+ mesenchymal cells and can functionally support hematopoiesis. Overall, our study provides new insights into HE differentiation toward HSC and the role of AGM RUNX1+ niche cells in this process. Our expansive scRNA-seq datasets represents a powerful resource to investigate these processes further.