The known responses of vascular endothelial growth factor (VEGF) are mediated through VEGF receptor-2 (VEGFR-2/KDR) in endothelial cells. However, it is unknown whether VEGFR-1 (Flt-1) is an inert decoy or a signaling receptor for VEGF during physiological or pathological angiogenesis. Here we report that VEGF-stimulated nitric oxide (NO) release is inhibited by blockade of VEGFR-1 and that VEGFR-1 via NO negatively regulates of VEGFR-2-mediated proliferation and promotes formation of capillary networks in human umbilical vein endothelial cells (HUVECs). Inhibition of VEGFR-1 in a murine Matrigel angiogenesis assay induced large aneurysm-like structures. VEGF-induced capillary growth over 14 days was inhibited by anti-VEGFR-2-blocking antibody as determined by reduced tube length between capillary connections (P < 0.0001) in an in vitro angiogenesis assay. In contrast, loss of VEGFR-1 activity with a neutralizing anti-VEGFR-1 antibody resulted in an increase in the accumulation of endothelial cells (P < 0.0001) and a dramatic decrease in the number of capillary connections that were restored by the addition of NO donor. Porcine aortic endothelial (PAE) cells expressing human VEGFR-1 but not VEGFR-2 plated on growth factor-reduced Matrigel rearranged into tube-like structures that were prevented by anti-VEGFR-1 antibody or a cGMP inhibitor. VEGF stimulated NO release from VEGFR-1- but not VEGFR-2-transfected endothelial cells and placenta growth factor-1 stimulated NO release in HUVECs. Blockade of VEGFR-1 increased VEGF-mediated HUVEC proliferation that was inhibited by NO donors, and potentiated by NO synthase inhibitors. These data indicate that VEGFR-1 is a signaling receptor that promotes endothelial cell differentiation into vascular tubes, in part by limiting VEGFR-2-mediated endothelial cell proliferation via NO, which seems to be a molecular switch for endothelial cell differentiation.