Organs-on-chips are microengineered in vitro tissue structures that can be used as platforms for physiological and pathological research. They provide tissue-like microenvironments in which different cell types can be co-cultured in a controlled manner to create synthetic organ mimics. Blood vessels are an integral part of all tissues in the human body. Development of vascular structures is therefore an important research topic for advancing the field of organs-on-chips since generated tissues will require a blood or nutrient supply. Here, we have engineered three-dimensional constructs of vascular tissue inside microchannels by injecting a mixture of human umbilical vein endothelial cells, human embryonic stem cell-derived pericytes (the precursors of vascular smooth muscle cells) and rat tail collagen I into a polydimethylsiloxane microfluidic channel with dimensions 500 μm × 120 μm × 1 cm (w × h × l). Over the course of 12 h, the cells organized themselves into a single long tube resembling a blood vessel that followed the contours of the channel. Detailed examination of tube morphology by confocal microscopy revealed a mature endothelial monolayer with complete PECAM-1 staining at cell-cell contacts and pericytes incorporated inside the tubular structures. We also demonstrated that tube formation was disrupted in the presence of a neutralizing antibody against transforming growth factor-beta (TGF-β). The TGF-β signaling pathway is essential for normal vascular development; deletion of any of its components in mouse development results in defective vasculogenesis and angiogenesis and mutations in humans have been linked to multiple vascular genetic diseases. In the engineered microvessels, inhibition of TGF-β signaling resulted in tubes with smaller diameters and higher tortuosity, highly reminiscent of the abnormal vessels observed in patients with one particular vascular disease known as hereditary hemorrhagic telangiectasia (HHT). In summary, we have developed microengineered three-dimensional vascular structures that can be used as a model to test the effects of drugs and study the interaction between different human vascular cell types. In the future, the model may be integrated into larger tissue constructs to advance the development of organs-on-chips.