Tumor-associated angiogenesis is postulated to be regulated by the balance between pro- and anti-angiogenic factors. We demonstrate here that the critical step in establishing the angiogenic capability of human tumor cells is the repression of a key secreted anti-angiogenic factor, thrombospondin-1 (Tsp-1). This repression is essential for tumor formation by mammary epithelial cells and kidney cells engineered to express SV40 early region proteins, hTERT, and H-RasV12. In transformed epithelial cells, a signaling pathway leading from Ras to Tsp-1 repression induces the sequential activation of PI3 kinase, Rho and ROCK, leading to activation of Myc through phosphorylation, thereby enabling Myc to repress Tsp-1 transcription. In transformed fibroblasts, however, the repression of Tsp-1 can be achieved by an alternative mechanism involving inactivation of both p53 and pRb. We thus describe novel mechanisms by which the activation of oncogenes in epithelial cells and the inactivation of tumor suppressors in fibroblasts permits angiogenesis and, in turn, tumor formation.