Blood vessel networks form in a 2-step process of sprouting angiogenesis followed by selective branch regression and stabilization of remaining vessels. Pericytes are known to function in stabilizing blood vessels, but their role in vascular sprouting and selective vessel regression is poorly understood. The endosialin (CD248) receptor is expressed by pericytes associated with newly forming but not stable quiescent vessels. In the present study, we used the Endosialin(-/-) mouse as a means to uncover novel roles for pericytes during the process of vascular network formation. We demonstrate in a postnatal retina model that Endosialin(-/-) mice have normal vascular sprouting but are defective in selective vessel regression, leading to increased vessel density. Examination of the Endosialin(-/-) mouse tumor vasculature revealed an equivalent phenotype, indicating that pericytes perform a hitherto unidentified function to promote vessel destabilization and regression in vivo in both physiologic and pathologic angiogenesis. Mechanistically, Endosialin(-/-) mice have no defect in pericyte recruitment. Rather, endosialin binding to an endothelial associated, but not a pericyte associated, basement membrane component induces endothelial cell apoptosis and detachment. The results of the present study advance our understanding of pericyte biology and pericyte/endothelial cell cooperation during vascular patterning and have implications for the design of both pro- and antiangiogenic therapies.