The role of pericytes in the regulation of endothelial cell growth has been well documented with in vitro co-culture system. In the original report by the group of Dr. D'Amore, TGF-beta has been considered as a potential mediator. However, the expression levels of TGF-beta in human retinal pericytes are extremely low. Instead, pericytes express the high levels of pigment epithelium derived factor (PEDF), a potent anti-angiogenesis factor. When exposed to hypoxia, both transcription and translation levels of PEDF in pericytes are significantly decreased. Importantly, the function of PEDF to endothelial cells is dose-dependent. It acts as an apoptosis inducer at the high dose (50 ug/ml) while it rather stimulates the growth of endothelial cells at the lower doses (0.5-5.0 ug/ml). It is known that preventing the basement membrane destruction by metalloproteinases eventually prevents the new vessel growth (angiogenesis). Pericytes are also the major source of inhibitors (TIMP) of these metalloproteinases. It appears that pericytes regulate endothelial cells by producing both PEDF and TIMP. In diabetic retinopathy, the selective loss of pericytes occurs as the first morphological lesion. Since pericytes are important in regulating the growth of endothelial cells, preventing this early event of pericyte loss may be a key preventing the further progress to the clinically apparent proliferative retinopathy.