Infusion of endothelial progenitor cells (EPC), but not of mature endothelial cells, promotes neovascularization after ischemia. We performed gene expression profiling of EPC and endothelial cells to identify genes that might be important for the neovascularization capacity of EPC. Notably, the protease cathepsin L (CathL) was highly expressed in EPC as opposed to endothelial cells and was essential for matrix degradation and invasion by EPC in vitro. CathL-deficient mice showed impaired functional recovery following hind limb ischemia, supporting the concept of a crucial role for CathL in postnatal neovascularization. Infused CathL-deficient progenitor cells neither homed to sites of ischemia nor augmented neovascularization. Forced expression of CathL in mature endothelial cells considerably enhanced their invasive activity and sufficed to confer their capacity for neovascularization in vivo. We concluded that CathL has a critical role in the integration of circulating EPC into ischemic tissue and is required for EPC-mediated neovascularization.