The endothelium plays a central role in the maintenance of vascular homeostasis. One of the main effectors of endothelial dysfunction is ANG II, and pharmacological approaches to limit ANG II bioactivity remain the cornerstone of cardiovascular therapeutics. Angiotensin converting enzyme-2 (ACE2) has been identified as a critical negative modulator of ANG II bioactivity, counterbalancing the effects of ACE in determining net tissue ANG II levels; however, the role of ACE2 in the vasculature remains unknown. In the present study, we hypothesized that ACE2 is a novel target to limit endothelial dysfunction and atherosclerosis. To this aim, we performed in vitro gain and loss of function experiments in endothelial cells and evaluated in vivo angiogenesis and atherosclerosis in apolipoprotein E-knockout mice treated with AdACE2. ACE2-deficient mice exhibited impaired endothelium-dependent relaxation. Overexpression of ACE2 in human endothelial cells stimulated endothelial cell migration and tube formation, and limited monocyte and cellular adhesion molecule expression; effects that were reversed in ACE2 gene silenced and endothelial cells isolated from ACE2-deficient animals. ACE2 attenuated ANG II-induced reactive oxygen species production in part through decreasing the expression of p22phox. The effects of ACE2 on endothelial activation were attenuated by pharmacological blockade of ANG-(1-7) with A779. ACE2 promoted capillary formation and neovessel maturation in vivo and reduced atherosclerosis in apolipoprotein E-knockout mice These data indicate that ACE2, in an ANG-(1-7)-dependent fashion, functions to improve endothelial homeostasis via a mechanism that may involve attenuation of NADPHox-induced reactive oxygen species production. ACE2-based treatment approaches may be a novel approach to limit aberrant vascular responses and atherothrombosis.