Despite an important role in vascular development and repair, the origin of endothelial progenitors remains unknown. Accumulating evidence indicates that cells derived from the hematopoietic system participate in angiogenesis. However, the identity and functional role of these cells remain controversial. Here we show that vascular endothelial cells can differentiate from common myeloid progenitors and granulocyte/macrophage progenitors. Endothelial cells derived from transplanted bone marrow-derived myeloid lineage progenitors expressed CD31, von Willebrand factor, and Tie2 but did not express the hematopoietic markers CD45 and F4/80 or the pericyte markers desmin and smooth muscle actin. Lineage tracing analysis in combination with a Tie2-driven Cre/lox reporter system revealed that, in contrast to bone marrow-derived hepatocytes, bone marrow-derived endothelial cells are not the products of cell fusion. The establishment of both hematopoietic and endothelial cell chimerism after parabiosis demonstrates that circulating cells can give rise to vascular endothelium in the absence of acute radiation injury. Our findings indicate that endothelial cells are an intrinsic component of myeloid lineage differentiation and underscore the close functional relationship between the hematopoietic and vascular systems.