Many aspects of development, tumor growth and metastasis depend upon the provision of an adequate vasculature. This can be a result of regulated angiogenesis, recruitment of circulating endothelial progenitors and/or vascular trans-differentiation. The present study demonstrates that treatment of SKBR-3 breast cancer cells with retinoic acid (RA), an important regulator of embryogenesis, cancer and other diseases, stimulates the formation of networks in Matrigel. RA-treatment of SKBR-3 cells co-cultured with human umbilical vein endothelial cells resulted in the formation of mixed structures. RA induces expression of many endothelial genes including vascular endothelial (VE) cadherin. VE-cadherin was also induced by RA in a number of other breast cancer cells. We show that RA-induced VE-cadherin is responsible for the RA-induced morphological changes. RA rapidly induced the expression of Sox-9 and ER81, which in turn form a complex on the VE-cadherin promoter and are required to mediate the transcriptional regulation of VE-cadherin by RA. These data indicate that RA may promote the expression of endothelial genes resulting in endothelial-like differentiation, or provide a mechanism whereby circulating endothelial progenitor cells could be incorporated into a growing organ or tumor.