Recent observations have shown that Drm, a member the Dan family of bone morphogenic protein (BMP) antagonists, induces endothelial cell (EC) sprouting in vitro and angiogenesis in vivo by interacting with signaling EC receptors in a BMP-independent manner. Here, recombinant Drm (rDrm) up-regulates angiopoientin-1 (Ang-1) expression in EC without affecting Ang-2 and Tie-2 receptor expression. Ang-1 up-regulation is mediated by the activation of the transcription factor NF-kappaB. Specific inhibition of Ang-1 activity by anti-Ang-1 antibodies, soluble Tie-2 receptor, or Ang-1 siRNA transfection significantly reduced the rDrm-mediated sprouting of EC in three-dimensional fibrin and type I collagen gels. In addition, Ang-1 antagonists inhibited the angiogenic activity exerted by rDrm in the chick embryo chorioallantoic membrane. Taken together, the data indicate that the proangiogenic activity of Drm is mediated by the activation of an Ang-1-dependent autocrine loop of stimulation in EC.