Since the initial discovery of endothelial progenitor cells (EPC), and their promise in increasing angiogenesis and vasculogenesis, a myriad of papers have highlighted their potential application in experimental and clinical neovascularization and in tissue engineering. However, promising reports are contrasted by other studies that could not find a role for EPC in neovascularization. Presently, two types of endothelial progenitor cell populations are recognized. The first population provides early-outgrowth CD34+/VEGFR-2+ cells, or colony-forming unit endothelial cells (CFU-EC), which represent myeloid cells with some endothelial properties, but no ability to form endothelial colonies. They can stimulate neovascularization by paracrine means, but are not incorporated in the endothelial lining themselves. The second population generates the late-outgrowth endothelial colony-forming cells (ECFC) from a very scant blood-derived cell population. ECFC have a very high proliferative potential, can insert into the endothelial lining of new blood vessels, and can also form endothelial tubes by themselves after stimulation with the proper angiogenic stimulus. This review surveys the mobilization of progenitor cells from the bone marrow, the homing of EPC (CFU-EC) to areas of neovascularization, and the participation of EPC (ECFC) in the endothelial lining of newly formed blood vessels. Specific emphasis has been placed on the role of proteases, which include serine proteases, including urokinase, L-cathepsin, and several ADAM- and matrix metalloproteinases. The specific properties of ECFC make them a potential source of cells for tissue engineering applications, but much has to be learned about their nature, origin and properties.