Recently, we reported a novel protein of the tumor necrosis factor (TNF) superfamily, named vascular endothelial cell growth inhibitor (VEGI), which is expressed predominantly in endothelial cells. When a secreted form of this new protein was overexpressed in mouse colon cancer cells, the growth of tumors formed by these cells in black mice was inhibited. We now report that recombinant VEGI inhibits the proliferation of endothelial cells but not that of other types of cells examined. The protein also inhibits formation of capillary-like structures by endothelial cells in collagen gels, and the growth of capillaries into collagen gels placed on the chick chorioallantoic membrane. The anticancer potential of VEGI was examined in a breast cancer xenograft tumor model in which the cancer cells were co-injected with Chinese hamster ovary cells overexpressing a secreted form of the protein. The co-injection resulted in potent inhibition of xenograft tumor growth. Our findings are consistent with the view that VEGI is an endothelial cell-specific negative regulator of angiogenesis.