ABSTRACT. Vascular endothelial growth factor (VEGF), an angiogenic factor for endothelial cells, is produced by glomerular and tubular epithelia. Using immunoelectron microscopy, VEGF expression by podocytes (GEC) and the proximal tubular epithelium of rat kidney was confirmed. To elucidate the mechanisms of VEGF production and its physiologic consequences, studies were performed in cultured GEC and proximal tubular epithelial cells (RPTEC). Both GEC and RPTEC expressed VEGF-120 and 164 mRNA, as detected by quantitative RT-PCR. Hypoxia resulted in an increase in mRNA abundance, more robust in RPTEC than in GEC, and an increase in VEGF expression by 1.9- and 1.6-fold, respectively. 30 mM d-glucose, but not 30 mM l-glucose, resulted in the elevation of VEGF mRNA in RPTEC, but not in GEC, although both cell types showed a comparable modest increase in VEGF expression. Combined treatment (hypoxia and 30 mM d-glucose) resulted in an increase of VEGF mRNA only in RPTEC; however, an enhanced protein expression was detectable in both cell types. To investigate the role of VEGF in branching angiogenesis, “sandwich” co-cultures were applied with endothelial cells and capillary tube formation was compared under the above conditions. Both RPTEC and GEC induced VEGF-dependent capillary tube formation by co-cultured endothelial cells and in both cell types hypoxia further augmented angiogenesis. In contrast, 30 mM d-glucose suppressed angiogenesis in co-cultures with both cell types despite increased mRNA for VEGF receptors 1 and 2. This study shows (1) that VEGF produced by GEC and RPTEC is necessary for branching angiogenesis and (2) that hypoxic environment stimulates VEGF production by both epithelial cell types and augments branching angiogenesis, whereas (3) hyperglycemic microenvironment, although also stimulatory for VEGF production, fails to augment angiogenesis.