Abstract Endothelial progenitor cells (EPC), whether isolated from the bone marrow (BM), peripheral (PB), or cord blood (CB), represent a promising tool for the development of novel cell therapies. EPC have been shown to contribute to re-endothelialization and neovascularization of damaged tissue, and have been proposed to be some of the primary regulators of tissue regeneration in organs such as the liver. Many studies have looked at the role of EPC in vasculogenic processes, but very few, if any, have focused their efforts on determining the complete differentiative potential of EPC upon transplantation in an experimental model that permits the robust formation of donor-derived tissue-specific cells in the absence of selective pressure to drive differentiation towards a specific phenotype. To this end, CB-derived EPC were obtained as previously described (Ingram et al. Blood:104,2004), transduced with a retroviral vector expressing dsRed, and transplanted (Tx) into 55–60 days old fetal sheep recipients (n=8) at concentrations ranging from 0.5–1.5 × 106cells/fetus. Recipients were then evaluated at 85 days post-transplant for the presence of donor (human)-specific cell types using flow cytometry and confocal microscopy. Using these methods, we found that levels of EPC engraftment in liver, as detected by dsRed expression, correlated directly with the Tx cell dose. Furthermore co-localization of CD31 or vWF was found within the dsRed+ cells. In animals receiving lower cell doses, EPC engrafted throughout the liver at the overall level of 0.12±0.03%; this number doubled in animals that received 2.6 × 106cells. Importantly, there was a preferential distribution of EPC around the vessels, with the EPC comprising 10 to 25% of the cells located around the perivascular areas, with some contributing directly to the endothelial layer of these vessels. Furthermore, expression of Connexin-43 and 45 in engrafted EPC demonstrated that the EPC had not only engrafted, but had also functionally integrated into the developing blood vessels. In addition, co-expression of albumin and alpha-fetoprotein in some of the engrafted EPC suggests that some of these cells may also have contributed to cells with a hepatocyte-like phenotype. Flow cytometric analysis of BM and PB of the transplanted sheep demonstrated that EPC engrafted and proliferated in the BM, with cells expressing CD105 (6.2±2.2) and CD146 (0.6±0.1), and continued to circulate in the PB with cells positive for CD105 (1.4±0.4) and CD146 (0.9±0.2). Of interest is that a CD45 negative aminopeptidase N+ (APN/CD13) population was found in both BM (18±7) and PB (5.6±2). This is particularly interesting, since CD13/APN is a potent regulator of vascular endothelial morphogenesis during angiogenesis. In conclusion, CB derived EPC are able to engraft and proliferate in vivo, integrate into the developing cytoarchitecture, and establish a circulating EPC pool ensuring long-term contribution to ongoing vasculogenesis.