We have shown that puromycin insensitive leucyl-specific aminopeptidase (PILSAP) is required for regulation of angiogenesis. However, it remains unclear whether PILSAP plays a role in endothelial cell (EC) differentiation. We examined the role of PILSAP by using an embryoid bodies (EBs) culture system. Fms-like tyrosine kinase-1 (Flk-1) showed two expression peaks on days 4 and 10 of culture. These two peaks represent populations of mesodermal precursors and mature ECs, respectively. Endothelial markers such as VE-cadherin, CD34, CD31 and Tie2 followed the first peak of Flk-1. Interestingly, the expression of PILSAP showed a pattern similar to that of Flk-1. ES cells transfected with mutant PILSAP (mtPILSAP) cDNA of a dominant negative activity organized less vascular structure and showed decreased levels of vascular lineage markers. The similar results were obtained in EBs treated with leucinethiol, a specific inhibitor of leucine aminopeptidase or siRNA for PILSAP. However, Flk-1 expression was unaffected on day 4. The expression of markers for hematopoietic lineage and muscle cells in mtPILSAP-EBs was also reduced. These results suggest that although PILSAP may not function in the initial generation of Flk-1 positive mesodermal precursors, it dose play a role in growth of vascular, hematopoietic, and muscular lineage population from those precursors.