The aim of this study was to examine the potential of endothelial outgrowth cells (EOCs) expanded from CD34(+) cord blood-derived cells (CB-EOCs) for overexpression of therapeutic transgenes. As proof of principle, we overexpressed icIL-1ra in CB-EOCs. Proinflammatory activation of CB-EOCs in response to cytokine stimulation (IL-1beta and tumor necrosis factor (TNF)) and during coculture with monocytes showed that icIL-1ra-expressing CB-EOCs express significantly reduced levels of ICAM-1, MCP-1 and thrombin receptor expression. Moreover, overexpression of icIL-1ra attenuated the IL-1beta-mediated proinflammatory activation by diminishing the expression of ICAM-1, SELE, MCP-1 and IL-1beta. Interestingly, overexpression of icIL-1ra also inhibited TNF-induced upregulation of ICAM-1. Expression of ICAM-1, VCAM-1, tissue factor and IL-1beta was also decreased on direct contact with monocytes. These changes in gene expression were accompanied by functional reduction in leukocyte rolling, adhesion of monocytes to CB-EOCs, as well as by a reduction in transendothelial migration of monocytes. Our findings show that CB-EOCs stably expressing transgenic icIL-1ra are protected against activation by not only IL-1beta but also TNFalpha-mediated proinflammatory stimuli and inhibit decisive pathomechanisms of inflammatory processes such as rolling, adhesion and transmigration of monocytes. Therefore, icIL-ra transgenic CB-EOCs may prove to be beneficial in the treatment of IL-1beta- and TNFalpha-mediated inflammatory vasculopathies.