Endothelial cells (EC) derived from embryonic stem cells (ESC) require additional functional characterization before they are used as a cell therapy. We explore several physiologically relevant functions of ESC-derived EC (ESC-EC), such as its capacity to produce nitric oxide (NO), regulate permeability, activate and express surface molecules for the recruitment of leukocytes in response to inflammatory stimuli, migrate and grow new blood vessels, lay down extracellular matrix, and take up low-density lipoproteins. We also examined the ESC-EC ability to upregulate NO in response to shear stress and downregulate NO in response to pro-inflammatory TNF-alpha activation. Functional responses of ESC-EC were compared with those of cultured mouse aortic ECs. The ESC-EC exhibit most aspects of functional endothelium, but interesting differences highlighted.