Transcriptional enhancer elements are responsible for orchestrating the temporal and spatial control over gene expression that is crucial for programming cell identity during development. Here, we describe a novel enhancer element important for regulating Prox1 expression in lymphatic endothelial cells. This evolutionarily conserved enhancer is bound by key lymphatic transcriptional regulators including GATA2, FOXC2, NFATC1 and PROX1. CRISPR-Cas9 genome editing of this enhancer element revealed that deletion of only 5 nucleotides encompassing the GATA2 binding site has a dramatic impact on lymphatic vascular development; mice homozygous for this deletion die soon after birth exhibiting profound lymphatic vascular defects. Lymphatic endothelial cells in enhancer mutant mice exhibit reduced levels of genes characteristic of lymphatic endothelial cell identity and acquire characteristics of haemogenic endothelium, including the capacity to generate haematopoietic cells. These data reveal the first transcriptional enhancer element important for regulating Prox1 expression and lymphatic endothelial cell identity and suggest that Prox1 is important for repressing haemogenic cell identity in the lymphatic endothelium.