Sprouting of new capillaries from pre-existing blood vessels is a hallmark of angiogenesis during embryonic development and solid tumor growth . In addition to the vascular endothelial growth factor (VEGF) and its receptors, the Tie receptors and their newly identified ligands, the angiopoietins, have been implicated in the control of blood vessel formation [2,3]. Although 'knockouts' of the gene encoding the Tie2 receptor, or its activating ligand angiopoietin-1 (Ang1), result in embryonic lethality in mice due to an absence of remodeling and sprouting of blood vessels [4,5], biological activity in vitro has not yet been described for this receptor-ligand system. In an assay in which a monolayer of endothelial cells were cultured on microcarrier beads and embedded in three-dimensional fibrin gels, recombinant Ang1 (0.5-10 nM) induced the formation of capillary sprouts in a dose-dependent manner that was completely inhibited by soluble Tie2 receptor extracellular domains. In contrast with VEGF, which also induced sprouting of capillaries, Ang1 was only very weakly mitogenic for endothelial cells. Suboptimal concentrations of VEGF and Ang1 acted synergistically to induce sprout formation. Thus, the biological activity of Ang1 in vitro is consistent with the specific phenotype of mice deficient in Tie2 or Ang1. The data suggest that, like in other developmental systems, blood vessel formation requires a hierarchy of master-control genes in which VEGF and angiopoietins, along with their receptors, are amongst the most important regulators.