PURPOSE: Endothelial progenitor cells (EPCs) play a significant role in neovascularization of ischemic tissues and in re-endothelialization of injured blood vessels and hold promise for therapeutic neovascularization. The purpose of this study was to study the differentiation of EPCs from human cord blood (CB) mononeuclear cells (MNCs) during in vitro expansion. METHODS: Cord blood was collected from 5 normal full-term babies and MNCs were isolated. 1 x 10(8) MNCs were plated on a 100 mm culture dish coated with 50 ug/ml of human fibronectin (Calbiochem) and cultured in EGM-2 BulletKit system (Clonetics). Endothelial outgrowing cells were assessed by morphology, flow cytometry, immunohistochemistry, RT-PCR and in vitro tube formation in Matrigel plate. RESULTS: Spindle-shaped cells which were grown at the first week of culture were positive for VEGFR-2 and CD31, and negative for vWF, VE-Cadherin. Cobblestone shaped cells which were grown at the third week of culture were positive for VEGFR-2, VE-Cadherin, vWF and VE-Cadherin. Cultured cells expressed high level of mRNA of VEGFR-2, vWF and VE-Cadherin and also formed capillary tubes on Matrigel plates. CONCLUSION: We provide evidence that EPCs in human cord blood differentiate into functional endothelial cells. Under the situation of increasing allogeneic transplantation using CB, these differentiated cells could provide potential clinical applications for "cell therapy" in the situation of vascular injuries (ie, hindlimb ischemia and myocardial infacrtion), because of the large number of EPCs in addition to their homing capacity to the vascularization site.