Background: Though angiopoietin-1 is known to play critical roles in vascular development, their mechanism of action is still unclear. We hypothesized that angiopoietin-1 would induce differentiation of the mobilized mononuclear cells into endothelial cells(ECs) and vascular smooth muscle cells(VSMCs). Methods and Results: The mononuclear cells(MNCs) mobilized by G-CSF were cultured in the presence of recombinant human angiopoietin-1(COMP-Ang1) or PDGF. Two kinds of cells were observed in serial culture: The oval-shaped cells and the spindle-shaped cells. The oval-shaped cells were positive for both a-smooth muscle actin(SMA) and CD31, suggesting common vascular progenitor cells. On the contrary, the spindle-shaped cells were only CD31 positive, suggesting endothelial progenitor cells(EPCs). The differentiation of mobilized MNCs into ECs and VSMCs was evaluated by RT-PCR. The mobilized MNCs treated with COMP-Ang1 highly expressed both EC and VSMC transcription factors, ETS-1 and GATA-6 at day 3 of culture, and expressed significantly more CD31, eNOS and a-SMA at day 7 compared to vehicle treated control, suggesting more cells were committed to ECs and VSMCs by COMP-Ang1 . Next, the effect of COMP-Ang1 on the proliferation of EPCs among the mobilized MNCs was evaluated. EPC colony numbers were found to be doubled by COMP-Ang1 treatment compared to control and each EPC showed increased survival evaluated by trypan blue assay(P<0.001). In matrigel tube formation assay, COMP-Ang1 treated EPCs showed significant increase in capillary formation. In vivo mouse hind limb ischemia model, local injection of COMP-Ang1-stimulated mobilized MNCs increased limb salvage significantly compared to vehicle-treated mobilized MNCs (n=6, p<0.05). Interestingly, COMP-Ang1-stimulated mobilized MNCs showed more incorporation into vessels of the ischemic tissue and expressed mature EC and VSMC markers, VE-cadherin and a-SMA. Conclusion: Angiopoietin-1 induced the differentiation of the mobilized MNCs into both ECs and VSMCs, leading to increased incorporation into neovessels. These findings suggest that angiopoietin-1 treatment might augment the formation of functionally competent non-leaky vessel by mobilized MNCs.