Angiogenesis has key roles in development and in the progression of human diseases such as cancer. Consequently, identifying the novel markers and regulators of angiogenesis is a critical task. The dioxin receptor (AhR) contributes to vascular homeostasis and to the endothelial response to toxins, although the mechanisms involved are largely uncharacterized. Here, we show that AhR-null mice (AhR(-/-)) have impaired angiogenesis in vivo that compromises tumor xenograft growth. Aortic rings emigration experiments and RNA interference indicated that AhR(-/-) endothelial cells failed to branch and to form tube-like structures. Such a phenotype was found to be vascular endothelial growth factor (VEGF)-dependent, as AhR(-/-) aortic endothelial cells (MAECs) secreted lower amounts of active VEGF-A and their treatment with VEGF-A rescued angiogenesis in culture and in vivo. Further, the addition of anti-VEGF antibody to AhR(+/+) MAECs reduced angiogenesis. Treatment under hypoxic conditions with 2-methoxyestradiol suggested that HIF-1alpha modulates endothelial VEGF expression in an AhR-dependent manner. Importantly, AhR-null stromal myofibroblasts produced increased transforming growth factor-beta (TGFbeta) activity, which inhibited angiogenesis in human endothelial cells (HMECs) and AhR(-/-) mice, whereas the co-culture of HMECs with AhR(-/-) myofibroblasts or with their conditioned medium inhibited branching, which was restored by an anti-TGFbeta antibody. Moreover, VEGF and TGFbeta activities cooperated in modulating angiogenesis, as the addition of TGFbeta to AhR(-/-) MAECs further reduced their low basal VEGF-A activity. Thus, AhR modulates angiogenesis through a mechanism requiring VEGF activation in the endothelium and TGFbeta inactivation in the stroma. These data highlight the role of AhR in cardiovascular homeostasis and suggest that this receptor can be a novel regulator of angiogenesis during tumor development.