Increasing evidence suggests that autocrine endothelial cell activity contributes significantly to the angiogenic cascade once the endothelial cells are initially activated by exogenous stimuli. We have employed the differential RNA-display technique to identify endothelial cell genes that are expressed under autocrine control as a result of the cells' release from growth arrest. Among the differentially expressed genes was the activin-binding and- neutralizing glycoprotein follistatin (FS), which was expressed by migrating endothelial cells and down-regulated once the cells had reached growth arrest. Cytokine exposure identified FS as a basic fibroblast growth factor (bFGF)-inducible gene. In contrast, activin-beta A, an inhibitor of endothelial cell proliferation, was constitutively expressed by migrating and resting endothelial cells. Exogenous recombinant FS induced proliferation of human umbilical vein endothelial cells and low bFGF-expressing bovine aortic endothelial cells. In vivo, FS was moderately angiogenic in the rabbit cornea. However, FS implantation in the cornea in combination with subcritical concentrations of bFGF induced a strong angiogenic response. The data demonstrate that FS by itself and particularly in synergy with bFGF induces angiogenesis. Furthermore, differential expression by endothelial cells suggests a critical role of the FS/activin-beta A system in regulating autocrine endothelial cell activity.