Tissue engineering requires formation of a de novo stable vascular network. Because of their ability to proliferate, differentiate into endothelial cells, and form new vessels, blood-derived endothelial progenitor cells (EPCs) are attractive source of cells for use in engineering blood vessels. However, the durability and function of EPC-derived vessels implanted in vivo are unclear. To this end, we directly compared formation and functions of tissue-engineered blood vessels generated by peripheral blood- and umbilical cord blood-derived EPCs in a model of in vivo vasculogenesis. We found that adult peripheral blood EPCs form blood vessels that are unstable and regress within 3 weeks. In contrast, umbilical cord blood EPCs form normal-functioning blood vessels that last for more than 4 months. These vessels exhibit normal blood flow, perm-selectivity to macromolecules, and induction of leukocyte-endothelial interactions in response to cytokine activation similar to normal vessels. Thus, umbilical cord blood EPCs hold great therapeutic potential, and their use should be pursued for vascular engineering.