The formation of new microvasculature by capillary sprouting at the site of islet transplantation is crucial for the long-term survival and function of the graft. Vascular endothelial growth factor (VEGF), an endothelial cell-specific mitogen with potent angiogenic and vascular permeability-inducing properties, may be a key factor in modulating the revascularization of islets after transplantation. In this study, we examined the gene expression of VEGF mRNA in three tumor cell lines and in isolated whole and dispersed rat islets in vitro by Northern blot hybridization in normoxic (5% CO2, 95% humidified air) and hypoxic (1% O2, 5% CO2, 94% N2) culture conditions. Increased expression of VEGF mRNA was observed in beta-TC3, RAW 264.7, and IC-21 tumor cell lines when subjected to hypoxia. With isolated whole islets in normoxic culture, a threefold increase in VEGF mRNA (P < 0.001) was seen at 48 h as compared with freshly isolated islets. This response was similar to the 3.8-fold increase observed with islets subjected to hypoxia. Dispersed rat islet cell clusters cultured on Matrigel for 24 h under hypoxic conditions showed a 3.4-fold increase (P < 0.01) in VEGF mRNA compared with those cultured in normoxia. This correlated with increased VEGF secretion as determined by enzyme-linked immunosorbent assay. Immunohistochemical studies revealed the presence of increased expression of VEGF protein near the center of islets after 24 h of normoxic culture. Islet cell clusters on Matrigel showed intense cellular localization of VEGF in both beta-cells and non-beta-cells. These findings suggest that rat islet cells, when subjected to hypoxia during the first few days after transplantation, may act as a major source of VEGF, thereby initiating revascularization and maintaining the vascular permeability of the grafted islets.