Experimental data indicates that soluble vascular endothelial growth factor (VEGF) receptor 1 (sFlt-1) modulates the guidance cues provided to sprouting blood vessels by VEGF-A. To better delineate the role of sFlt-1 in VEGF signaling, we have developed an experimentally based computational model. This model describes dynamic spatial transport of VEGF, and its binding to receptors Flt-1 and Flk-1, in a mouse embryonic stem cell model of vessel morphogenesis. The model represents the local environment of a single blood vessel. Our simulations predict that blood vessel secretion of sFlt-1 and increased local sFlt-1 sequestration of VEGF results in decreased VEGF–Flk-1 levels on the sprout surface. In addition, the model predicts that sFlt-1 secretion increases the relative gradient of VEGF–Flk-1 along the sprout surface, which could alter endothelial cell perception of directionality cues. We also show that the proximity of neighboring sprouts may alter VEGF gradients, VEGF receptor binding, and the directionality of sprout growth. As sprout distances decrease, the probability that the sprouts will move in divergent directions increases. This model is a useful tool for determining how local sFlt-1 and VEGF gradients contribute to the spatial distribution of VEGF receptor binding, and can be used in conjunction with experimental data to explore how multi-cellular interactions and relationships between local growth factor gradients drive angiogenesis.