Activation of vascular endothelial cells (ECs) by growth factors initiates a cascade of events during angiogenesis in vivo consisting of EC tip cell selection, sprout formation, EC stalk cell proliferation, and ultimately vascular stabilization by support cells. Although EC functional assays can recapitulate one or more aspects of angiogenesis in vitro, they are often limited by undefined substrates and lack of dependence on key angiogenic signaling axes. Here, we designed and characterized a chemically-defined model of endothelial sprouting behavior in vitro using human induced pluripotent stem cell-derived endothelial cells (iPSC-ECs). We rapidly encapsulated iPSC-ECs at high density in poly(ethylene glycol) (PEG) hydrogel spheres using thiol-ene chemistry and subsequently encapsulated cell-dense hydrogel spheres in a cell-free hydrogel layer. The hydrogel sprouting array supported pro-angiogenic phenotype of iPSC-ECs and supported growth factor-dependent proliferation and sprouting behavior. iPSC-ECs in the sprouting model responded appropriately to several reference pharmacological angiogenesis inhibitors of vascular endothelial growth factor, NF-κB, matrix metalloproteinase-2/9, protein kinase activity, and β-tubulin, which confirms their functional role in endothelial sprouting. A blinded screen of 38 putative vascular disrupting compounds (pVDCs) from the US Environmental Protection Agency’s ToxCast library identified six compounds that inhibited iPSC-EC sprouting and five compounds that were overtly cytotoxic to iPSC-ECs at a single concentration. The chemically-defined iPSC-EC sprouting model (iSM) is thus amenable to enhanced-throughput screening of small molecular libraries for effects on angiogenic sprouting and iPSC-EC toxicity assessment.