Vasculogenesis and angiogenesis are the major forms of blood vessel formation. Angiogenesis is the process where new vessels grow from pre-existing blood vessels, and is very important in the functional recovery of pathological conditions, such as wound healing and ischemic heart diseases. The development of better animal model and imaging technologies in past decades has greatly enriched our understanding on vasculogenesis and angiogenesis processes. Hypoxia turned out to be an important driving force for angiogenesis in various ischemic conditions. It stimulates expression of many growth factors like vascular endothelial growth factor, platelet-derived growth factor, insulin-like growth factor, and fibroblast growth factor, which play critical role in induction of angiogenesis. Other cellular components like monocytes, T cells, neutrophils, and platelets also play significant role in induction and regulation of angiogenesis. Various stem/progenitor cells also being recruited to the ischemic sites play crucial role in the angiogenesis process. Pre-clinical studies showed that stem/progenitor cells with/without combination of growth factors induce neovascularization in the ischemic tissues in various animal models. In this review, we will discuss about the fundamental factors that regulate the angiogenesis process and the use of stem cells as therapeutic regime for the treatment of ischemic diseases.