The role of soluble factors (including angiogenic cytokines) and extracellular matrix components in the regulation of angiogenesis is clearly established. However, the interrelationship between these factors and perivascular mesenchymal cells is not well understood. Here we have used a three-dimensional collagen gel coculture system to assess the effect of mesenchymal C3H10T1/2 cells on vascular endothelial growth factor-A (VEGF-A)- and fibroblast growth factor-2 (FGF-2)-induced angiogenesis in vitro. We found that coculture markedly potentiated the angiogenic activity of VEGF-A, irrespective of whether or not direct cell-to-cell contact occurred. In contrast, under conditions in which cell-to-cell contact was possible, FGF-2-induced angiogenesis was inhibited by cocultured 10T1/2 cells; this effect was not seen when cell-to-cell contact was prevented. Attempts to identify the molecules responsible for this effect allowed us to exclude FGF-2, transforming growth factorbeta1, platelet derived growth factor-BB, angiopoietin-1, and NO as possible mediators of the potentiating effect of coculture on VEGF-A-induced invasion. In the living organism, angiogenesis occurs in a three-dimensional microenvironment. Contrary to the inhibitory effect of 10T1/2 cells previously reported by others in two-dimensional cultures, our data demonstrate that the paracrine interaction between endothelial and mesenchymal cells potentiates angiogenesis in vitro and that this is cytokine-specific, i.e., it occurs with VEGF-A but not with FGF-2.