Vascular derivatives of human embryonic stem cells (hESC) are being developed as sources of tissue-specific cells for organ regeneration. However, identity of developmental pathways that modulate the specification of endothelial cells is not known yet. We studied phosphatidylinositol 3-kinase (PI3K)-Forkhead box O transcription factor 1A (FOXO1A) pathways during differentiation of hESC toward endothelial lineage and on proliferation, maturation, and cell death of hESC-derived endothelial cells (hESC-EC). During differentiation of hESC, expression of FOXO1A transcription factor was linked to the expression of a cluster of angiogenesis- and vascular remodeling-related genes. PI3K inhibitor LY294002 activated FOXO1A and induced formation of CD31(+) hESC-EC. In contrast, differentiating hESC with silenced FOXO1A by small interfering RNA (siRNA) showed lower mRNA levels of CD31 and angiopoietin2. LY294002 decreased proliferative activity of purified hESC-EC, while FOXO1A siRNA increased their proliferation. LY294002 inhibits migration and tube formation of hESC-EC; in contrast, FOXO1A siRNA increased in vitro tube formation activity of hESC-EC. After in vivo conditioning of cells in athymic nude rats, cells retain their low FOXO1A expression levels. PI3K/FOXO1A pathway is important for function and survival of hESC-EC and in the regulation of endothelial cell fate. Understanding these properties of hESC-EC may help in future applications for treatment of injured organs.