Two distinct mechanisms, vasculogenesis and angiogenesis implement the formation of the vascular network in the embryo. Vasculogenesis gives rise to the heart and the first primitive vascular plexus inside the embryo and in its surrounding membranes, as the yolk sac circulation. Angiogenesis is responsible for the remodeling and expansion of this network. While vasculogenesis refers to in situ differentiation and growth of blood vessels from mesodermal derived hemangioblasts, angiogenesis comprises two different mechanisms: endothelial sprouting and intussusceptive microvascular growth (IMG). The sprouting process is based on endothelial cell migration, proliferation and tube formation. IMG divides existing vessel lumens by formation and insertion of tissue folds and columns of interstitial tissue into the vessel lumen. The latter are termed interstitial or intervascular tissue structures (ITSs) and tissue pillars or posts. Intussusception also includes the establishment of new vessels by in situ loop formation in the wall of large veins. The molecular regulation of these distinct mechanisms is discussed in respect to the most important positive regulators, VEGF and its receptors flk-1 (KDR) and flt-1, the Angiopoietin/tie system and the ephrin-B/EpH-B system. The cellular mechanisms and the molecular regulation of angiogenesis in the pathological state are summarized and the differences of physiological and pathological angiogenesis elaborated.