The monocyte population in blood is considered a possible source of endothelial precursors. Because endothelial-specific receptor tyrosine kinases act as regulators of endothelial cell function, we investigated whether expression of the vascular endothelial growth factor receptor-2 (VEGFR-2) on monocytes is important for their endothelial-like functional capacity. Peripheral-blood monocytes expressing vascular endothelial growth factor receptor-2 (VEGFR-2), or CD14⁺/VEGFR-2⁺, were isolated, and their phenotypic, morphologic, and functional capacities were compared with those of monocytes negative for this marker (CD14⁺/VEGFR-2^-). CD14⁺/VEGFR-2⁺ cells constituted approximately 2% ± 0.5% of the total population of monocytes and 0.08% ± 0.04% of mononuclear cells in blood. CD14⁺/VEGFR-2⁺ cells exhibited the potential to differentiate in vitro into cells with endothelial characteristics. The cells were efficiently transduced by a lentiviral vector driving expression of the green fluorescence protein (GFP). Transplantation of GFP-transduced cells into balloon-injured femoral arteries of nude mice significantly contributed to efficient reendothelialization. CD14⁺/VEGFR-2^- did not exhibit any of these characteristics. These data demonstrate that the expression of VEGFR-2 on peripheral blood monocytes is essential for their endothelial-like functional capacity and support the notion of a common precursor for monocytic and endothelial cell lineage. Our results help clarify which subpopulations may restore damaged endothelium and may participate in the maintenance of vascular homeostasis.