TIE2 is a receptor-like tyrosine kinase expressed almost exclusively in endothelial cells and early hemopoietic cells and required for the normal development of vascular structures during embryogenesis. We report the identification of a secreted ligand for TIE2, termed Angiopoietin-1, using a novel expression cloning technique that involves intracellular trapping and detection of the ligand in COS cells. The structure of Angiopoietin-1 differs from that of known angiogenic factors or other ligands for receptor tyrosine kinases. Although Angiopoietin-1 binds and induces the tyrosine phosphorylation of TIE2, it does not directly promote the growth of cultured endothelial cells. However, its expression in close proximity with developing blood vessels implicates Angiopoietin-1 in endothelial developmental processes.