The precise and conceptual insight of circulating endothelial progenitor cell (EPC) kinetics is hampered by the absence of an assay system capable of evaluating the EPC differentiation cascade. An assay system for EPC colony formation was developed to delineate circulating EPC differentiation. EPC colony-forming assay using semisolid medium and single or bulk CD133(+) cells from umbilical cord blood exhibited the formation of two types of attaching cell colonies made of small or large cells featuring endothelial lineage potential and properties, termed small EPC colony-forming units and large EPC colony-forming units, respectively. In vitro and in vivo assays of each EPC colony-forming unit cell revealed a differentiation hierarchy from small EPC to large EPC colonies, indicating a primitive EPC stage with highly proliferative activity and a definitive EPC stage with vasculogenic properties, respectively. Experimental comparison with a conventional EPC culture assay system disclosed EPC colony-forming unit cells differentiate into noncolony-forming early EPC. The fate analysis of single CD133(+) cells into the endothelial and hematopoietic lineage was achieved by combining this assay system with a hematopoietic progenitor assay and demonstrated the development of colony-forming EPC and hematopoietic progenitor cells from a single hematopoietic stem cell. EPC colony-forming assay permits the determination of circulating EPC kinetics from single or bulk cells, based on the evaluation of hierarchical EPC colony formation. This assay further enables a proper exploration of possible links between the origin of EPC and hematopoietic stem cells, representing a novel and powerful tool to investigate the molecular signaling pathways involved in EPC biology.