Within the phenotypically and functionally heterogeneous group of circulating progenitor cells (CPC), a subclass of cells with vascular repair potential have been identified. These CPC are detected and isolated based on single or combined expression of CD34, CD133 and VEGFR-2, and referred to as endothelial progenitor cells. Here we asked whether CPC subsets defined by single expression of these markers exhibit functional heterogeneity. As functional parameters, we chose the capacity of CPC to differentiate into endothelial cells. Moreover, we studied their role in remodeling by recruitment of inflammatory cells, an aspect that has been little explored. We established an in vivo model in which the intrinsic functional capacity of these human CPC subsets was studied. Human CD34+ CPC, but not CD133+ or VEGFR-2+ CPC, seeded in Matrigel pellets and transplanted subcutaneously in a nude mouse host, contributed little to donor-derived neovascularization. However, host angiogenesis in the Matrigel implant, as demonstrated by the presence of capillaries containing erythrocytes and expressing mouse CD31, was strong in response to implantation of human CD34+ CPC and significantly lower in response to the other two CPC subsets. Moreover, the CD34+ CPC subset was significantly superior to CD133+ CPC and VEGFR-2+ CPC in the recruitment of host monocytes/macrophages. These three CPC populations were further dissected into seven discrete subsets, based on three-parameter flow cytometry analysis of combined expression patterns of CD34, CD133 and VEGFR-2. In conclusion, in our system, CD34+ CPC contribute marginally to neovascularization by differentiation but are potent regulators of the host angiogenic and pro-inflammatory response, suggesting a possible role for these cells in the remodeling of vascular lesions.