Pericytes (PCs) are endothelium-associated cells that play an important role in normal vascular function and maintenance. We developed a method comparable to GMP quality protocols for deriving self-renewing perivascular progenitors from the human embryonic stem cell (hESC), line ESI-017. We identified a highly scalable, perivascular progenitor cell line that we termed PC-A, which expressed surface markers common to mesenchymal stromal cells. PC-A cells were not osteogenic or adipogenic under standard differentiation conditions and showed minimal angiogenic support function in vitro. PC-A cells were capable of further differentiation to perivascular progenitors with limited differentiation capacity, having osteogenic potential (PC-O) or angiogenic support function (PC-M), while lacking adipogenic potential. Importantly, PC-M cells expressed surface markers associated with pericytes. Moreover, PC-M cells had pericyte-like functionality being capable of co-localizing with human umbilical vein endothelial cells (HUVECs) and enhancing tube stability up to 6 days in vitro. We have thus identified a self-renewing perivascular progenitor cell line that lacks osteogenic, adipogenic and angiogenic potential but is capable of differentiation toward progenitor cell lines with either osteogenic potential or pericyte-like angiogenic function. The hESC-derived perivascular progenitors described here have potential applications in vascular research, drug development and cell therapy.