Reactive species derived from cell oxygenation processes play an important role in vascular homeostasis and the pathogenesis of many diseases including retinopathy of prematurity. We show that CYP1B1-deficient (CYP1B1(-/-)) mice fail to elicit a neovascular response during oxygen-induced ischemic retinopathy. In addition, the retinal endothelial cells (ECs) prepared from CYP1B1(-/-) mice are less adherent, less migratory, and fail to undergo capillary morphogenesis. These aberrant cellular responses were completely reversed when oxygen levels were lowered or an antioxidant added. CYP1B1(-/-) ECs exhibited increased oxidative stress and expressed increased amounts of the antiangiogenic factor thrombospondin-2 (TSP2). Increased lipid peroxidation and TSP2 were both observed in retinas from CYP1B1(-/-) mice and were reversed by administration of an antioxidant. Reexpression of CYP1B1 in CYP1B1(-/-) ECs resulted in down-regulation of TSP2 expression and restoration of capillary morphogenesis. A TSP2 knockdown in CYP1B1(-/-) ECs also restored capillary morphogenesis. Thus, CYP1B1 metabolizes cell products that modulate intracellular oxidative stress, which enhances production of TSP2, an inhibitor of EC migration and capillary morphogenesis. Evidence is presented that similar changes occur in retinal endothelium in vivo to limit neovascularization.