Realizing the full therapeutic potential of mesenchymal stromal/stem cells (MSCs) awaits improved understanding of mechanisms controlling their fate. Using MSCs cultured as spheroids to recapitulate a three-dimensional cellular environment, we show that perturbing the mesenchymal regulators, platelet-derived growth factor (PDGF) receptors or fibronectin, reverts MSCs toward mesodermal progenitors with endothelial potential that can potently induce neovascularization in vivo. MSCs within untreated spheroids retain their mesenchymal spindle shape with abundant smooth muscle α-actin filaments and fibronectin-rich matrix. Inhibiting PDGF receptors or depleting fibronectin induces rounding and depletes smooth muscle α-actin expression; these cells have characteristics of mesenchymoangioblasts, with enhanced expression of mesendoderm and endoderm transcription factors, prominent upregulation of E-cadherin, and Janus kinase signaling-dependent expression of Oct4A and Nanog. PDGF receptor-inhibited spheroids also upregulate endothelial markers platelet endothelial cell adhesion molecule 1 and vascular endothelial-cadherin and secrete many angiogenic factors, and in vivo they potently stimulate neovascularization, and their MSCs integrate within functional blood vessels that are perfused by the circulation. Thus, MSC potency and vascular induction are regulated by perturbing mesenchymal fate. © 2013 AlphaMed Press.