The long term goal of our studies is to efficiently derive human endothelial cell types from pluripotent stem cells, such as hES and iPS cells, for human vascular regeneration and clinical therapies. To do so, we need to understand the mechanisms that govern human endothelial cell development, but they have been largely undefined. In our Preliminary Studies, we have begun to dissect the signaling hierarchy that modulates the differentiation of human endothelial cells from pluripotent stem cells, and found that some factors involved in this process differ from those required for murine endothelial cell differentiation. Using a hES cell culture system, we found that Indian Hedgehog (Ihh) promoted endothelial cell differentiation, as evidenced by gene/protein expression, morphology and DiI-AcLDL uptake. Furthermore, inhibition of bone morphogenic protein 4 (BMP4) suppressed endothelial cell formation whereas addition of rhBMP4 to cells treated with the hh inhibitor cyclopamine promoted endothelial cell development. Thus, our Preliminary Studies reveal that Ihh promotes human endothelial cell differentiation from hES cells via BMP signaling, providing novel insights applicable to modulating blood vessel formation for human clinical therapies. The proposed studies will build on our Preliminary Data and further dissect the molecular signaling hierarchy that regulates human endothelial cell differentiation. We will also investigate molecular regulators that promote the generation of specialized human endothelial cell types. Finally, we will optimize our hES cell culture system to enable more efficient generation of endothelial cell types from mesodermal progenitors. Our overarching hypotheses are that the steps that lead to human endothelial cell lineage commitment, differentiation and specialization are dissectible and definable in our pluripotent stem cell model system. Furthermore, by understanding the sequence and kinetics of the molecular events needed for these process, we will gain insight into how to more efficiently derive human endothelial cell types for tissue engineering and clinical therapies for prevalent pathologies. The following Specific Aims will test these hypotheses: 1) further define the mechanism(s) by which Ihh and BMP signaling regulate human differentiation of human endothelial cells. 2) investigate the molecular regulation of human endothelial cell specialization; and 3) establish a feeder-free culture system for efficient differentiation and specialization of endothelial cells from human mesodermal progenitors.