With regard to human induced pluripotent stem cells (hiPSCs), in which adult cells are reprogrammed into embryonic-like cells using defined factors, their functional and transcriptional expression pattern during endothelial differentiation has yet to be characterized. In this study, hiPSCs and human embryonic stem cells (hESCs) were differentiated using the embryoid body method, and CD31(+) cells were sorted. Fluorescence activated cell sorting analysis of hiPSC-derived endothelial cells (hiPSC-ECs) and hESC-derived endothelial cells (hESC-ECs) demonstrated similar endothelial gene expression patterns. We showed functional vascular formation by hiPSC-ECs in a mouse Matrigel plug model. We compared the gene profiles of hiPSCs, hESCs, hiPSC-ECs, hESC-ECs, and human umbilical vein endothelial cells (HUVECs) using whole genome microarray. Our analysis demonstrates that gene expression variation of hiPSC-ECs and hESC-ECs contributes significantly to biological differences between hiPSC-ECs and hESC-ECs as well as to the "distances" among hiPSCs, hESCs, hiPSC-ECs, hESC-ECs, and HUVECs. We further conclude that hiPSCs can differentiate into functional endothelial cells, but with limited expansion potential compared with hESC-ECs; thus, extensive studies should be performed to explore the cause and extent of such differences before clinical application of hiPSC-ECs can begin.