Liver sinusoidal endothelial cells (LSECs) form a highly specialized microvasculature that plays a critical role in liver function and disease. To better understand this role, we developed a strategy to generate LSECs from human pluripotent stem cells (hPSCs) by first optimizing the specification of arterial and venous angioblasts and derivative endothelial populations. Induction of a LSEC-like fate by hypoxia, cyclic AMP (cAMP) agonism, and transforming growth factor β (TGF-β) inhibition revealed that venous endothelial cells responded more rapidly and robustly than the arterial cells to upregulate LSEC markers and functions in vitro. Upon intrahepatic transplantation in neonates, venous angioblasts engrafted the liver and generated mature, fenestrated LSECs with scavenger functions and molecular profiles of primary human LSECs. When transplanted into the liver of adult mice, angioblasts efficiently gave rise to mature LSECs with robust factor VIII (FVIII) production. Humanization of the murine liver with hPSC-derived LSECs provides a tractable system for studying the biology of this key liver cell type. Keywords: FVIII; LSEC; VEGF-A; artery; fenestration; hPSC; humanized hepatic vasculature; hypoxia; liver sinusoidal endothelial cell; sinusoid; vein.