Angiogenesis (the formation of new blood vessels) was investigated in an in vitro model utilizing isolated human and bovine endothelial cells and a mixture of basement membrane proteins (Matrigel). Plating endothelial cells on Matrigel led to their rapid organization into a capillary-like network. The formation of the network was found to depend on the ability of these cells to emerge from a resting state in the cell cycle. Human skin fibroblasts were found to produce a factor(s) inresponse to TGF-beta that promotes the formation and proliferation of the capillary-like network by endothelial cells. These results suggest that the effects of TGF-beta on angiogenesis are mediated indirectly through other cell types.