Fine tuning of vascular endothelial growth factor (VEGF) signaling is critical in endothelial cell (EC) differentiation and vascular development. Nevertheless, the system for regulating the sensitivity of VEGF signaling has remained unclear. Previously, we established an embryonic stem cell culture reproducing early vascular development using Flk1 (VEGF receptor-2)+ cells as common progenitors, and demonstrated that cyclic adenosine monophosphate (cAMP) enhanced VEGF-induced EC differentiation. Here we show that protein kinase A (PKA) regulates sensitivity of Flk1+ vascular progenitors to VEGF signaling for efficient EC differentiation. Blockade of PKA perturbed EC differentiation and vascular formation in vitro and ex vivo. Overexpression of constitutive active form of PKA (CA-PKA) potently induced EC differentiation and vascular formation. Expression of Flk1 and Neuropilin-1 (NRP1), which form a selective and sensitive receptor for VEGF(165), was increased only in CA-PKA-expressing progenitors, enhancing the sensitivity of the progenitors to VEGF(165) by more than 10 times. PKA activation induced the formation of a VEGF(165), Flk1, and NRP1 protein complex in vascular progenitors. These data indicate that PKA regulates differentiation potential of vascular progenitors to be endothelial competent via the dual induction of Flk1 and NRP1. This new-mode mechanism regulating "progenitor sensitivity" would provide a novel understanding in vascular development and regeneration.