Vascular endothelial growth factor (VEGF) is essential for the induction of angiogenesis and drives both endothelial cell (EC) proliferation and migration. It has been suggested that VEGF also regulates vessel diameter, although this has not been tested explicitly. The two most abundant isoforms, VEGF(121) and VEGF(165), both signal through VEGF receptor 2 (VEGFR-2). We recently optimized a three-dimensional in vitro angiogenesis assay using HUVECs growing on Cytodex beads and embedded in fibrin gels. Fibroblasts provide critical factors that promote sprouting, lumen formation, and vessel stability. Using this assay, we have examined the role of VEGF in setting vessel diameter. Low concentrations of both VEGF(121) and VEGF(165) promote growth of long, thin vessels, whereas higher concentrations of VEGF remarkably enhance vessel diameter. Placental growth factor, which binds to VEGFR-1 but not VEGFR-2, does not promote capillary sprouting. Moreover, specific inhibition of VEGFR-2 signaling results in a dramatic reduction of EC sprouting in response to VEGF, indicating the critical importance of this receptor. The increase in vessel diameter is the result of cell proliferation and migration, rather than cellular hypertrophy, and likely depends on MEK1-ERK1/2 signaling. Both phosphatidylinositol 3-kinase and p38 activity are required for cell survival. We conclude that the diameter of new capillary sprouts can be determined by the local concentration of VEGF and that the action of VEGF on angiogenic EC in this assay is critically dependent on signaling through VEGFR-2.