The granulocyte colony-stimulating factor (G-CSF) promotes angiogenesis. However, the exact mechanism is not known. We demonstrate that vascular endothelial growth factor (VEGF) was released by Gr-1+CD11b- neutrophils but not Gr-1-CD11b+ monocytes prestimulated with G-CSF in vitro and in vivo. Similarly, in vivo, concomitant with an increase in neutrophil numbers in circulation, G-CSF augmented plasma VEGF level in vivo. Local G-CSF administration into ischemic tissue increased capillary density and provided a functional vasculature and contributed to neovascularization of ischemic tissue. Blockade of the VEGF pathway abrogated G-CSF-induced angiogenesis. On the other hand, as we had shown previously, VEGF can induce endothelial progenitor cell (EPC) mobilization. Here, we show that G-CSF also augmented the number of circulating VEGF receptor-2 (VEGFR2) EPCs as compared with untreated controls. Blocking the VEGF/VEGFR1, but to a much lesser extent, the VEGF/VEGFR2 pathway in G-CSF-treated animals delayed tissue revascularization in a hindlimb model. These data clearly show that G-CSF modulates angiogenesis by increasing myelomonocytic cells (VEGFR1+ neutrophils) and their release of VEGF. Our results indicated that administration of G-CSF into ischemic tissue provides a novel and safe therapeutic strategy to improve neovascularization.