Vascular endothelial growth factor (VEGF), which acts via members of a family of endothelial-specific receptor tyrosine kinases, is the only factor that has been shown definitively to play a role in the formation of the embryonic vasculature. Only one other family of receptor tyrosine kinases, comprising TIE1 and TIE2, is largely endothelial cell specific. We have recently cloned a ligand for TIE2, termed Angiopoietin-1. Here we show that mice engineered to lack Angiopoietin-1 display angiogenic deficits reminiscent of those previously seen in mice lacking TIE2, demonstrating that Angiopoietin-1 is a primary physiologic ligand for TIE2 and that it has critical in vivo angiogenic actions that are distinct from VEGF and that are not reflected in the classic in vitro assays used to characterize VEGF. Angiopoietin-1 seems to play a crucial role in mediating reciprocal interactions between the endothelium and surrounding matrix and mesenchyme.