Therapeutic angiogenesis provides a promising approach to treat ischemic cardiovascular diseases through the delivery of proangiogenic cells and/or molecules. Outgrowth endothelial cells (OECs) are vascular progenitor cells that are especially suited for therapeutic strategies given their ease of noninvasive isolation from umbilical cord or adult peripheral blood and their potent ability to enhance tissue neovascularization. These cells are recruited to sites of vascular injury or tissue ischemia and directly incorporate within native vascular endothelium to participate in neovessel formation. A better understanding of how OEC activity may be boosted under hypoxia with external stimulation by proangiogenic molecules remains a challenge to improving their therapeutic potential. While vascular endothelial growth factor (VEGF) is widely established as a critical factor for initiating angiogenesis, sphingosine-1-phosphate (S1P), a bioactive lysophospholipid, has recently gained great enthusiasm as a potential mediator in neovascularization strategies. This study tests the hypothesis that hypoxia and the presence of VEGF impact the angiogenic response of OECs to S1P stimulation in vitro. We found that hypoxia altered the dynamically regulated S1P receptor 1 (S1PR1) expression on OECs in the presence of S1P (1.0 μM) and/or VEGF (1.3 nM). The combined stimuli of S1P and VEGF together promoted OEC angiogenic activity as assessed by proliferation, wound healing, 3D sprouting, and directed migration under both normoxia and hypoxia. Hypoxia substantially augmented the response to S1P alone, resulting in ~6.5-fold and ~25-fold increases in sprouting and directed migration, respectively. Overall, this report highlights the importance of establishing hypoxic conditions in vitro when studying ischemia-related angiogenic strategies employing vascular progenitor cells.