Endothelial progenitor cells (EPCs) are mobilized from bone marrow to peripheral blood, and contribute to angiogenesis in tissue. In the process, EPCs are exposed to shear stress generated by blood flow and tissue fluid flow. Our previous study showed that shear stress induces differentiation of mature EPCs in adhesive phenotype into mature endothelial cells and, moreover, arterial endothelial cells. In this study we investigated whether immature EPCs in a circulating phenotype differentiate into mature EPCs in response to shear stress. When floating-circulating phenotype EPCs derived from ex vivo expanded human cord blood were exposed to controlled levels of shear stress in a flow-loading device, the bioactivities of adhesion, migration, proliferation, antiapoptosis, tube formation, and differentiated type of EPC colony formation increased. The surface protein expression rate of the endothelial markers VEGF receptor 1 (VEGF-R1) and -2 (VEGF-R2), VE-cadherin, Tie2, VCAM1, integrin α(v)/β(3), and E-selectin increased in shear-stressed EPCs. The VEGF-R1, VEGF-R2, VE-cadherin, and Tie2 protein increases were dependent on the magnitude of shear stress. The mRNA levels of VEGF-R1, VEGF-R2, VE-cadherin, Tie2, endothelial nitric oxide synthase, matrix metalloproteinase 9, and VEGF increased in shear-stressed EPCs. Inhibitor analysis showed that the phosphoinositide 3-kinase (PI3K)/Akt/mammalian target of rapamycin (mTOR) signal transduction pathway is a potent activator of adhesion, proliferation, tube formation, and differentiation in response to shear stress. Western blot analysis revealed that shear stress activated the VEGF-R2 phosphorylation in a ligand-independent manner. These results indicate that shear stress increases differentiation, adhesion, migration, proliferation, antiapoptosis, and vasculogenesis of circulating phenotype EPCs by activation of VEGF-R2 and the PI3K/Akt/mTOR signal transduction pathway.