Vascular development consists of vasculogenesis and angiogenesis. The system of TIE2-Angiopoietin (Ang) is involved in angiogenesis. TIE2 regulates adhesion and dissociation between endothelial cells and mural cells, and survival, apoptosis, and chemotaxis of endothelial cells. Ang-2, which is produced by endothelial cells under tissue hypoxia, has been suggested to be a key regulator for the initiation of endothelial cell sprouting from pre-existing vessels. Although Ang-2 binds to TIE2, it does not promote activation of TIE2 on endothelial cells. Ang-2 produced from endothelial cells under hypoxia inhibits the binding of Ang-1 to TIE2. On the other hand, Ang-1 promotes activation of TIE2 and adhesion between endothelial cells and mural cells. Therefore, endothelial cells dissociated from mural cells by Ang-2 are free to move to avascular area where oxygen or nutrient is needed. We recently found that hematopoietic stem cells produce Ang-1 and promote chemotaxis and network formation of TIE2-positive endothelial cells. Moreover, hematopoietic stem cells change their fate into mural cell and stabilize the vessel structure. This novel function may be applied clinically to promote neovascularization by transplanting the hematopoietic stem cells at the desired site.Biomedical Reviews 2003; 14: 1-8.