Mesenchymal stem cells (MSCs) are a promising cell population for cell-based bone repair due to their proliferative potential, ability to differentiate into bone-forming osteoblasts, and their secretion of potent trophic factors that stimulate angiogenesis and neovascularization. To promote bone healing, autogenous or allogeneic MSCs are transplanted into bone defects after differentiation to varying degrees down the osteogenic lineage. However, the contribution of the stage of osteogenic differentiation upon angiogenic factor secretion is unclear. We hypothesized that the proangiogenic potential of MSCs was dependent upon their stage of osteogenic differentiation. After 7 days of culture, we observed the greatest osteogenic differentiation of MSCs when cells were cultured with dexamethasone (OM+). Conversely, VEGF protein secretion and upregulation of angiogenic genes were greatest in MSCs cultured in growth media (GM). Using conditioned media from MSCs in each culture condition, GM-conditioned media maximized proliferation and enhanced chemotactic migration and tubule formation of endothelial colony forming cells (ECFCs). The addition of a neutralizing VEGF(165/121) antibody to conditioned media attenuated ECFC proliferation and chemotactic migration. ECFCs seeded on microcarrier beads and co-cultured with MSCs previously cultured in GM in a fibrin gel exhibited superior sprouting compared to MSCs previously cultured in OM+. These results confirm that MSCs induced farther down the osteogenic lineage possess reduced proangiogenic potential, thereby providing important findings for consideration when using MSCs for bone repair.