Vasculogenesis/angiogenesis is one of the earliest processes that occurs during embryogenesis. ETV2 and SOX7 were previously shown to play a role in endothelial development; however, their mechanistic interaction has not been defined. In the present study, concomitant expression of Etv2 and Sox7 in endothelial progenitor cells was verified. ETV2 was shown to be a direct upstream regulator of Sox7 that binds to ETV2 binding elements in the Sox7 upstream regulatory region and activates transcription. We observed that SOX7 over-expression can mimic ETV2 and increase endothelial progenitor cells in embryonic bodies (EBs), while knockdown of Sox7 is able to block ETV2-induced increase in endothelial progenitor cell formation. Angiogenic sprouting was increased by ETV2 over-expression in EBs, and it was significantly decreased in the presence of Sox7 shRNA. Collectively, these studies support the conclusion that ETV2 directly regulates Sox7, and that ETV2 governs endothelial development by regulating transcriptional networks which include Sox7.