Pigment epithelium-derived factor (PEDF) encoded by serpinf1 is a potent anti-angiogenic factor found in a wide variety of fetal and adult tissues. Several reports have shown that lack of PEDF leads to osteogenesis imperfecta (OI) type VI whose hallmark is a defect in mineralization that leads to excessive osteoid build up that fails to mineralize. Because PEDF is antiangiogenic factor it would pose serious consequences on bone development and healing of fractures. To understand possible mechanisms by which PEDF plays a role in bone development and regulation of matrix mineralization, we determined the effects of exogenous PEDF on vascular endothelial growth factor (VEGF) expression by human mesenchymal stem cells (hMSCs) and mechanisms of its regulation by PEDF. Human MSCs incubated in normal medium supplemented with exogenous PEDF increased VEGF expression; this increase was also seen when PEDF was added to hMSCs undergoing osteogenic differentiation. MSCs maintained in osteogenic medium increased synthesis of both VEGF and PEDF but both factors were maintained relatively in balance during differentiation. To understand mechanisms by which exogenous PEDF regulated VEGF expression, hMSCs exposed to PEDF activated Erk signaling pathway in MSCs; inhibition of Erk signaling reduced VEGF mRNA expression as well as protein production suggesting that PEDF regulates VEGF expression in MSCs via Erk signaling pathway. In conclusion, PEDF increases VEGF expression by MSCs suggesting that regulation of VEGF by PEDF may be part of the mechanisms by which PEDF regulates osteoblastic mineralization.