Retinal angiogenesis in diabetes may lead to visual impairment and even irreversible blindness in people of working age group worldwide. The main pathological feature of proliferative diabetic retinopathy (PDR) is hypoxia, and overproduction of growth factors like vascular endothelial growth factor (VEGF) and erythropoietin (Epo). This results in pathological proliferation of retinal endothelial cells (RECs), leading to new vessel formation (angiogenesis). Inhibition of angiogenesis is a promising strategy for treatment of PDR and other retinal neovascular disorders. Pigment epithelium-derived factor (PEDF), a 50-kDa protein secreted by retinal pigment epithelium, inhibits the growth of new blood vessel induced in the eye in a variety of ways with a yet elusive mechanism. Here, we investigated the possible mechanism by which PEDF inhibits VEGF- and Epo-induced angiogenic effects in RECs is mediated through PI3K/Akt pathway. PEDF treatment induced the apoptosis in RECs by activating caspase-3 and DNA fragmentation. We found a dose-dependent increase in cell survival with VEGF or Epo, which was attenuated in the presence of PEDF. In addition, PEDF significantly (P < 0.05) inhibited migration and in vitro tube formation in RECs in the presence of VEGF as like PI3K/Akt inhibitor. Of interest, PEDF effectively abrogated VEGF-mediated phosphorylation of PI3K/Akt. Further studies using RECs transfected with constitutively active and dominant-negative forms of Akt suggest that PEDF could inhibit VEGF- and also Epo-induced angiogenesis by disruption of PI3K/Akt signaling.