We have previously shown that capillary endothelial cells grown on the surface of three-dimensional collagen gels can be induced to invade the underlying fibrillar matrix and to form capillary-like tubular structures in response to tumor-promoting phorbol esters or the angiogenic agent fibroblast growth factor (FGF). Since both phorbol esters and FGF stimulate phosphorylation of tyrosine residues, we treated endothelial cells with vanadate, an inhibitor of phosphotyrosine-specific phosphatases, to determine whether this agent could induce the expression of an angiogenic phenotype in these cells. We show here that vanadate stimulates endothelial cells to invade collagen matrices and to organize into characteristic tubules resembling those induced by FGF or phorbol esters. We have further observed that vanadate concomitantly stimulates endothelial cells to produce plasminogen activators (PAs), proteolytic enzymes which are induced by phorbol esters and FGF, and which have been implicated in the neovascular response; this stimulation can be accounted for by an increase in the levels of urokinase-type PA and tissue type PA mRNA. These results suggest a role for tyrosine phosphorylation in the regulation of the angiogenic phenotype in capillary endothelial cells.