Endothelial cells form the internal barrier between circulating blood and the vessel wall. They regulate arterial activity and mediate pathological reactions to vascular injuries such as atherosclerosis and balloon angioplasty. The development and differentiation of endothelial cells is a complex and coordinated process involving multiple levels of signaling and transcriptional and post-transcriptional regulation. Elucidating the mechanism of endothelial differentiation will not only enhance our understanding of vascular disease pathogenesis, but also facilitate our ability to produce vessels cells from pluripotent stem cells for regeneration purposes. In this review, we discuss the current understanding of how stem cells differentiate into endothelial cells at the level of signaling, transcription and microRNA regulation.