Endothelial cells are part of the normal bone marrow stroma. We have previously shown human umbilical cord blood (UCB) does not produce stroma in standard long-term cultures. Highly enriched (93–98%) UCB CD34+ cells were cultured for 6 weeks with interleukin-2 and conditioned medium from the 5637 carcinoma cell line (n = 4). The resulting ‘fibroblast like’ cells were shown to be endothelial by expression of von Willebrand factor (VWF), ICAM-1 (CD54), E-selectin (CD62E) and PECAM (CD31). Endothelial monolayers seeded with CD34+ UCB cells supported expansion of colony forming cells and CD34+ cells. We conclude that endothelial cell precursors circulate in UCB, and may be derived from the CD34+ cell fraction.