Proper bone remodeling requires an active process of angiogenesis which in turn supplies the necessary growth factors and stem cells. This tissue cooperation suggests a cross-talk between osteoblasts and endothelial cells. This work aims to identify the role of paracrine communication through vascular endothelial growth factor (VEGF) in co-culture between osteoblastic and endothelial cells. Through a well defined direct contact co-culture model between human osteoprogenitors (HOPs) and human umbilical vein endothelial cells (HUVECs), we observed that HUVECs were able to migrate along HOPs, inducing the formation of specific tubular-like structures. VEGF165 gene expression was detected in the HOPs, was up-regulated in the co-cultured HOPs and both Flt-1 and KDR gene expression increased in co-cultured HUVECs. However, the cell rearrangement observed in co-culture was promoted by a combination of soluble chemoattractive factors and not by VEGF165 alone. Despite having no observable effect on endothelial cell tubular-like formation, VEGF appeared to have a crucial role in osteoblastic differentiation since the inhibition of its receptors reduced the co-culture-stimulated osteoblastic phenotype. This co-culture system appears to enhance both primary angiogenesis events and osteoblastic differentiation, thus allowing for the development of new strategies in vascularized bone tissue engineering. J. Cell. Biochem. 106: 390–398, 2009. © 2009 Wiley-Liss, Inc.