Angiogenesis, or the formation of new blood vessels, is stimulated by angiogenic factors such as vascular endothelial growth factor (VEGF). Pigment epithelium-derived factor (PEDF) is a potent inhibitor of angiogenesis. To explore the mechanism by which PEDF acts, recombinant PEDF was expressed with a 6x-His tag (for purification) and a green fluorescent protein (GFP) tag. The PEDF fusion protein was confirmed to be active in inhibition of endothelial cell proliferation and migration. Direct binding of PEDF to both vascular endothelial growth factor receptor-1 (VEGFR-1) and VEGFR-2 was demonstrated in an in vitro assay similar to an enzyme-linked immunosorbent assay (ELISA). PEDF was shown by immune-confocal microscopy to be localized within treated endothelial cells. When VEGF-stimulated endothelial cells were incubated with PEDF the VEGF receptors showed intracellular localization. These data suggest that the interaction between PEDF and VEGFR-1 or VEGFR-2 may be a possible mechanism for inhibiting angiogenesis. PEDF may be binding to the VEGF receptors to promote their internalization and/or degradation to limit VEGF responses in treated cells.