Vascular endothelial growth factor (VEGF) is a major growth factor for developing endothelial cells (ECs). Embryonic lethality due to haploinsufficiency of VEGF in the mouse highlighted the strict dose dependency of VEGF on embryonic vascular development. Here we investigated the dose-dependent effects of VEGF on the differentiation of ES cell-derived fetal liver kinase 1 (Flk-1)/VEGF receptor 2(+) (VEGFR2(+)) mesodermal cells into ECs on type IV collagen under a chemically defined serum-free condition. These cells could grow even in the absence of VEGF, but differentiated mostly into mural cells positive for alpha-smooth muscle actin. VEGF supported in a dose-dependent manner the differentiation into ECs defined by the expression of VE-cadherin, platelet-endothelial cell adhesion molecule 1 (PECAM-1)/ CD31, CD34, and TIE2/TEK. VEGF requirement was greater at late than at early phase of culture during EC development, whereas response of VEGFR2(+) cells to VEGF-E, which is a virus-derived ligand for VEGFR2 but not for Flt-1/VEGFR1, was not dose sensitive even at late phase of culture. Delayed expression of VEGFR1 correlated with increased dose dependency of VEGF. These results suggested that greater requirement of VEGF in the maintenance than induction of ECs was due to the activity of VEGFR1 sequestering VEGF from VEGFR2 signal. The chemically defined serum-free culture system described here provides a new tool for assessing different factors for the proliferation and differentiation of VEGFR2(+) mesodermal cells.