Pigment epithelium-derived factor (PEDF) is a multifunctional protein with important roles in regulation of inflammation and angiogenesis. It is produced by various cell types including endothelial cells (EC). However, the cell autonomous impact of PEDF on EC function needs further investigation. Lung EC prepared from PEDF-deficient (PEDF -/-) mice were more migratory and failed to undergo capillary morphogenesis in Matrigel compared with wild type (PEDF +/+) EC. Although no significant differences were observed in the rates of apoptosis in PEDF -/- EC compared with PEDF +/+ cells under basal or stress conditions, PEDF -/- EC proliferated at a slower rate. PEDF -/- EC also expressed increased levels of proinflammatory markers including vascular endothelial growth factor, inducible nitric oxide synthase, vascular cell adhesion molecule-1, as well as altered cellular junctional organization, and nuclear localization of β-catenin. The PEDF -/- EC were also more adhesive, expressed decreased levels of thrombospondin-2, tenascin-C and osteopontin, and increased fibronectin. Furthermore, we showed lungs from PEDF -/- mice exhibited increased expression of macrophage marker F4/80 along with increased thickness of the vascular walls consistent with a pro-inflammatory phenotype. Together our data suggest that the PEDF expression makes significant contribution to modulation of the inflammatory and angiogenic phenotype of the lung endothelium.