Experimental and clinical evidence indicate that bone marrow cells participate in the process of new blood vessel formation. However, the molecular mechanisms underlying their recruitment and their exact role are still elusive. Here, we show that bone marrow cells are recruited to the sites of neoangiogenesis through the neuropilin-1 (NP-1) receptor and that they are essential for the maturation of the activated endothelium and the formation of arteries in mice. By exploiting adeno-associated virus vector-mediated, long-term in vivo gene expression, we show that the 165-aa isoform of VEGF, which both activates the endothelium and recruits NP-1+ myeloid cells, is a powerful arteriogenic agent. In contrast, neither the shortest VEGF121 isoform, which does not bind NP-1 and thus does not recruit bone marrow cells, nor semaphorin 3A, which attracts cells but inhibits endothelial activation, are capable of sustaining arterial formation. Bone marrow myeloid cells are not arteriogenic per se nor are they directly incorporated in the newly formed vasculature, but they contribute to arterial formation through a paracrine effect ensuing in the activation and proliferation of tissue-resident smooth muscle cells.