During embryonic vasculogenesis, endothelial precursor cells of mesodermal origin known as angioblasts assemble into a characteristic network pattern. Although a considerable amount of markers and signals involved in this process have been identified, the mechanisms underlying the coalescence of angioblasts into this reticular pattern remain unclear. Various recent studies hypothesize that autocrine regulation of the chemoattractant vascular endothelial growth factor (VEGF) is responsible for the formation of vascular networks in vitro. However, the autocrine regulation hypothesis does not fit well with reported data on in vivo early vascular development. In this study, we propose a mathematical model based on the alternative assumption that endodermal VEGF signalling activity, having a paracrine effect on adjacent angioblasts, is mediated by its binding to the extracellular matrix (ECM). Detailed morphometric analysis of simulated networks and images obtained from in vivo quail embryos reveals the model mimics the vascular patterns with high accuracy. These results show that paracrine signalling can result in the formation of fine-grained cellular networks when mediated by angioblast-produced ECM. This lends additional support to the theory that patterning during early vascular development in the vertebrate embryo is regulated by paracrine signalling.