Hematopoiesis in the embryo proceeds in a series of waves, with primitive erythroid-biased waves succeeded by definitive waves, within which the properties of hematopoietic stem cells (multilineage potential, self-renewal, and engraftability) gradually arise. Whereas self-renewal and engraftability have previously been examined in the embryo, multipotency has not been thoroughly addressed, especially at the single-cell level or within well-defined populations. To identify when and where clonal multilineage potential arises during embryogenesis, we developed a single-cell multipotency assay. We find that, during the initiation of definitive hematopoiesis in the embryo, a defined population of multipotent, engraftable progenitors emerges that is much more abundant within the yolk sac (YS) than the aorta-gonad-mesonephros (AGM) or fetal liver. These experiments indicate that multipotent cells appear in concert within both the YS and AGM and strongly implicate YS-derived progenitors as contributors to definitive hematopoiesis.