We report a method of purifying, characterizing and expanding endothelial cells (ECs) derived from CD133+ bone marrow cells, a subset of CD34+ haematopoietic progenitors. Isolated using immunomagnetic sorting (mean purity 90 ± 5%), the CD133+ bone marrow cells were grown on fibronectin-coated flasks in M199 medium supplemented with fetal bovine serum (FBS), vascular endothelial growth factor (VEGF), basic fibroblast growth factor (bFGF) and insulin growth factor (IGF-1). The CD133+ fraction contained 95 ± 4% CD34+ cells, 3 ± 2% cells expressing VEGF receptor (VEGFR-2/KDR), but did not express von Willebrand factor (VWF), VE-cadherin, P1H12 or TE-7. After 3 weeks of culture, the cells formed a monolayer with a typical EC morphology and expanded 11 ± 5 times. The cells were further purified using Ulex europaeus agglutinin-1 (UEA-1)-fluorescein isothiocyanate (FITC) and anti-FITC microbeads, and expanded with VEGF for a further 3 weeks. All of the cells were CD45− and CD14−, and expressed several endothelial markers (UEA-1, VWF, P1H12, CD105, E-selectin, VCAM-1 and VE-cadherin) and typical Weibel–Palade bodies. They had a high proliferative potential (up to a 2400-fold increase in cell number after 3 weeks of culture) and the capacity to modulate cell surface antigens upon stimulation with inflammatory cytokines. Purified ECs were also co-cultivated with CD34+ cells, in parallel with a purified fibroblastic cell monolayer. CD34+ cells (10 × 105) gave rise to 17 951 ± 2422 CFU-GM colonies when grown on endothelial cells, and to 12 928 ± 4415 CFU-GM colonies on fibroblast monolayers. The ECs also supported erythroid blast-forming unit (BFU-E) colonies better. These results suggest that bone marrow CD133+ progenitor cells can give rise to highly purified ECs, which have a high proliferative capacity, can be activated by inflammatory cytokines and are superior to fibroblasts in supporting haematopoiesis. Our data support the hypothesis that endothelial cell progenitors are present in adult bone marrow and may contribute to neo-angiogenesis.