The initiating factors in angiogenesis during development and disease are often microenvironmental changes, which induce signaling to the vasculature from affected tissues. Among these, lowered oxygen pressure, hypoxia, is one of the most potent inducers/initiators of an angiogenic response. Significant evidence indicates that hypoxia acts as a morphogen during vascularization - inducing and shaping the recruitment and formation of new vascular beds through critical transcriptional control pathways. Recent advances indicate that extensive interactions occur between developing blood vessels, the tissues that they vascularize, and the interstitial environment to control and shape the establishment of new capillary beds. Identification of the processes that control the hypoxic response intracellularly has allowed an increasingly sophisticated understanding of angiogenesis as a process that is very closely tied to the microenvironment that it occurs in. Further understanding of these processes may present powerful therapeutic opportunities for disease intervention.