Murine embryonic stem cells (ESC) provide a unique homogeneous cell system for studying early vasculogenic cell differentiation in vitro. In this report, we characterized endothelial development of cultured E14 ESCs and mapped the effects of vascular endothelial growth factor (VEGF) on these cells. After removal of leukemia inhibitory factor undifferentiated state ESCs were precultured for 6 days and then cultured for up to 30 days in differentiation culture medium, with or without supplemental VEGF. ELISA analysis was used to detect endogenous VEGF levels. Early vasculogenic development and expression of selected genes were characterized using flow cytometry for specific antigens and quantitative RT-PCR. ELISA analysis showed no endogenous VEGF after preculture and at day 2 in unsupplemented culture, therafter VEGF levels rise. Directly after preculture a high proportion (36%) of the ESCs showed positivity for endothelial CD31. We describe characteristic endothelial differentiation patterns in embryoid bodies (EB) kept in culture for up to 30 days. VEGF supplementation lead to qualitative changes in the EB vessels, specific activation of vasculogenesis-related genes (CD31, CD144, and ERG) and temporary down-regulation of the VEGF receptor gene flk-1. VEGF supplementation did not produce measurable changes in the endothelial cell fractions as judged by surface antigen presence. We conclude that early ESCs may undergo endothelial differentiation through VEGF-independent pathways, whereas endothelial cell patterns in EBs are cytokine dependent and fully stimulated by endogenous cytokine levels.