Angiopoietin-1 (Ang1) plays a crucial role in vascular and hematopoietic development mainly through its cognate receptor Tie2. However, little is known about precise role of Ang1 in embryonic stem cell (ESC) differentiation. Here, using soluble and potent variant of Ang1, COMP-Ang1, we determined effect of Ang1 on endothelial and hematopoietic differentiation of mouse ESC in OP9 co-culture system. Strikingly, Ang1 drove endothelial differentiation from $Flk-1^+$ mesodermal progenitor cells, whereas it suppressed hematopoietic differentiation. These effects were mainly mediated through Tie2 signaling, which was evidenced by complete blockade of these effects by soluble Tie2-Fc. The Ang1-induced endothelial differentiation was resulted from enhanced endothelial cell (EC) survival rather than increased EC proliferation. We further determined the effect of Ang1 on $CD41^+$ cells, which were transiently appeared and differentiated into both endothelial and hematopoietic lineages. Intriguingly, Ang1 directed $CD41^+$ cells into endothelial differentiation rather than hematopoietic differentiation. Efficient in vivo neovascularization was obtained with the EC, which were expanded by Ang1 stimulation. In addition, Ang1 also drove endothelial differentiation from mouse induced pluripotent stem cell (iPSC) and human ESC. Taken together, Ang1/Tie2 signaling is a strong stimulator for differentiation and expansion of endothelial linage from ESC and iPSC.