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The mammalian lymphatic vasculature is important for returning fluids from the extracellular tissue milieu back to the blood circulation. We showed previously that Prox1 dosage is important for the development of the mammalian lymphatic vasculature. The lack of Prox1 activity results in the complete absence of lymphatic endothelial cells (LECs). In Prox1 heterozygous embryos, the number of LECs is reduced because of a decrease in the progenitor pool in the cardinal vein. This reduction is caused by some progenitor cells being unable to maintain Prox1 expression. In this study, we identified Vegfr3, the cognate receptor of the lymphangiogenic growth factor Vegfc, as a dosage-dependent, direct in vivo target of Prox1. Using various mouse models, we also determined that Vegfr3 regulates Prox1 by establishing a feedback loop necessary to maintain the identity of LEC progenitors and that Vegfc-mediated activation of Vegfr3 signaling is necessary to maintain Prox1 expression in LEC progenitors. We propose that this feedback loop is the main sensing mechanism controlling the number of LEC progenitors and, as a consequence, the number of budding LECs that will form the embryonic lymphatic vasculature.