The islet endothelium comprises a specialized population of islet endothelial cells (IECs) expressing unique markers such as nephrin and α-1 antitrypsin (AAT) that are not found in endothelial cells in surrounding tissues. However, due to difficulties in isolating and maintaining a pure population of these cells, the information on these islet-specific cells is currently very limited. Interestingly, we have identified a large subpopulation of endothelial cells exhibiting IEC phenotype, while deriving insulin-producing cells from mouse embryonic stem cells (mESCs). These cells were identified by the uptake of low-density lipoprotein (LDL) and were successfully isolated and subsequently expanded in endothelial cell culture medium. Further analysis demonstrated that the mouse embryonic stem cell-derived endothelial cells (mESC-ECs) not only express classical endothelial markers, such as platelet endothelial cell adhesion molecule (PECAM1), thrombomodulin, intercellular adhesion molecule-1 (ICAM-1), and endothelial nitric oxide synthase (eNOS) but also IEC-specific markers such as nephrin and AAT. Moreover, mESC-ECs secrete basement membrane proteins such as collagen type IV, laminin, and fibronectin in culture and form tubular networks on a layer of Matrigel, demonstrating angiogenic activity. Further, mESC-ECs not only express eNOS, but also its eNOS expression is glucose dependent, which is another characteristic phenotype of IECs. With the ability to obtain highly purified IECs derived from pluripotent stem cells, it is possible to closely examine the function of these cells and their interaction with pancreatic β-cells during development and maturation in vitro. Further characterization of tissue-specific endothelial cell properties may enhance our ability to formulate new therapeutic angiogenic approaches for diabetes.