Pluripotent stem cells provide a promising source to derive endothelial progenitor cells (EPs) for the treatment of vascular disease, ischemia, and stroke. We have developed a robust protocol to differentiate human iPSCs into nearly pure EP population (94-97% CD31+ and 78-83% VE-Cadherin+). These EPs also expressed other endothelial markers, vWF and NOS3. Compared to HUVECs, these EPs had higher level of artery marker, HEY1, and lower level of venous marker, Coup-TFII. They were able to uptake Dil-acetylated low density lipoprotein and formed tubes on matrigel in vitro and in vivo in a matrigel. The iPSC-EPs injected into a hind limb ischemia mouse model formed patent blood vessels as revealed by adjacent localization of human specific CD31 cells and FITC-dextran that labeled blood flow two months after cell transplantation. No teratomas were detected in these mice. Our data suggest that EPs derived from iPSCs have great potential to treat ischemia.