Angiogenesis is the process by which new vascular networks are formed from preexisting capillaries. The small vessels are composed of two types of cells, namely endothelial cells (EC) and pericytes, with the former being encircled by the latter. We previously showed that hypoxia, the principal cause of angiogenesis, can induce the proliferation of pericytes as well as EC. In this report we present evidence that the hypoxic induction of pericyte growth can be ascribed at least in part to vascular endothelial growth factor (VEGF) produced by this very cell type. First, the finding that hypoxia can stimulate the proliferation of pericytes was confirmed by cultivating bovine retinal pericytes in a controlled-atmosphere culture chamber containing various concentrations of oxygen and then assaying pericyte synthesis of DNA. Second, Northern blot analysis revealed that pericyte levels of mRNA encoding VEGF increased as the atmospheric oxygen tension was decreased; this was accompanied by an increase in de novo synthesis of VEGF proteins. Third, pericytes were able to respond to exogenously added VEGF, resulting in a dose-dependent increase in viable cell numbers. Fourth, polyclonal antibodies against VEGF efficiently blocked the hypoxic induction of pericyte growth. Fifth, pericytes expressed the gene for fms-like tyrosine kinase 1 (flt1) as the predominant form of VEGF receptor, and tyrosine phosphorylation of this receptor protein was enhanced when pericytes were exposed to hypoxia, as it was when cells were exposed to VEGF. Sixth, the antisense DNA complement of flt1 mRNA abolished the hypoxia-induced stimulation of pericyte growth. Finally, exogenous VEGF stimulated the migration of pericytes in a dose-dependent manner. The results thus suggest that VEGF, which has been thought to be a specific mitogen for EC, also acts on neighboring pericytes, probably in both autocrine and paracrine manners, and that the hypoxia-induced overproduction of VEGF could promote not only EC sprouting but also the recruitment of pericytes, thereby contributing to the maturation of newly formed microvessels.