Angiogenesis governs the progression of multiple myeloma (MM). Circulating endothelial cells (CECs) contribute to angiogenesis and comprise mature ECs and endothelial progenitor cells (EPCs). The present study sought to characterize CECs and their relation to disease activity and therapeutic response in 31 consecutive patients with MM. CECs, identified as CD34(+)/CD146(+)/CD105(+)/CD11b(-) cells, were 6-fold higher in patients compared to controls and correlated positively with serum M protein and beta(2)-microglobulin. Circulating EPCs displayed late colony formation/outgrowth and capillary-like network formation on matrigel; these processes were inhibited after effective thalidomide treatment. Co-expression of vascular endothelial growth factor receptor-2 (KDR) and CD133 characterized EPCs in MM, and KDR mRNA elevations correlated with M protein levels. In vitro exposure of ECs to thalidomide or its derivative CC-5013 inhibited gene expression of the receptors for transforming growth factor-beta and thrombin. Thus, elevated levels of CECs and EPCs covary with disease activity and response to thalidomide, underscoring the angiogenic aspect of MM and suggesting that angioblastlike EPCs are a pathogenic biomarker and a rational treatment target in MM. The results also highlight the anti-angiogenic properties of thalidomide and CC-5013 and further elucidate possible mechanisms of their effectiveness against MM. (Blood. 2005;105:3286-3294).