Stem and progenitor cells are emerging as a potential source for cell-based therapies, in which large homogenous populations of differentiated cells are frequently deemed necessary for efficacy. Methods focused on biochemical cues have not yet yielded the numbers of endothelial cells thought necessary for cardiovascular applications. Interest in alternate methods has prompted the study of physical cues on stem and progenitor cell differentiation. In this study, fluid-based shear stress, at levels comparable to those experienced by endothelial cells in large vessels, was applied during the first few days of mouse embryonic stem cell differentiation. After 2 days of applied shear stress, there were increases in cell proliferation and in protein expression of endothelial markers (FLK1, VECAD, and PECAM). Further, treatment increased the number of FLK1+ cells from 1% to 40%, which were then capable of forming vessel-like structures in vitro. Thus, shear stress may be used to direct differentiation of embryonic stem cells toward an endothelial-like phenotype, helping to address the cell sourcing issue in cardiovascular regenerative medicine and tissue engineering.