Embryological data suggest that endothelial cells (ECs) direct the recruitment and differentiation of mural cell precursors. We have developed in vitro coculture systems to model some of these events and have shown that ECs direct the migration of undifferentiated mesenchymal cells (10T1/2 cells) and induce their differentiation toward a smooth muscle cell/pericyte lineage. The present study was undertaken to investigate cell proliferation in these cocultures. ECs and 10T1/2 cells were cocultured in an underagarose assay in the absence of contact. There was a 2-fold increase in bromodeoxyuridine labeling of 10T1/2 cells in response to ECs, which was completely inhibited by the inclusion of neutralizing antiserum against platelet-derived growth factor (PDGF)-B. Antisera against PDGF-A, basic fibroblast growth factor, or transforming growth factor (TGF)-beta had no effect on EC-stimulated 10T1/2 cell proliferation. EC proliferation was not influenced by coculture with 10T1/2 cells in the absence of contact. The cells were then cocultured so that contact was permitted. Double labeling and fluorescence-activated cell sorter analysis revealed that ECs and 10T1/2 cells were growth-inhibited by 43% and 47%, respectively. Conditioned media from contacting EC-10T1/2 cell cocultures inhibited the growth of both cell types by 61% and 48%, respectively. Although we have previously shown a role for TGF-beta in coculture-induced mural cell differentiation, growth inhibition resulting from contacting cocultures or conditioned media was not suppressed by the presence of neutralizing antiserum against TGF-beta. Furthermore, the decreased proliferation of 10T1/2 cells in the direct cocultures could not be attributed to downregulation of the PDGF-B in ECs or the PDGF receptor-beta in the 10T1/2 cells. Our data suggest that modulation of proliferation occurs during EC recruitment of mesenchymal cells and that heterotypic cell-cell contact and soluble factors play a role in growth control during vessel assembly.