Angiogenesis is important in the pathophysiology of endometriosis, a condition characterized by implantation of ectopic endometrium in the peritoneal cavity. Vascular endothelial growth factor (VEGF) is a potent angiogenic factor involved in physiological and pathological angiogenesis, and elevated levels of VEGF are found in peritoneal fluid of patients with endometriosis. Our aim was to investigate the site of expression and regulation of VEGF in endometriosis. VEGF immunoreactivity was found in tissue macrophages present in ectopic endometrium and in activated peritoneal fluid macrophages. Macrophage activation was highest in women with endometriosis, and media conditioned by peritoneal fluid macrophages from these women caused a VEGF-dependent increase in endothelial cell proliferation above that seen from normal women. Peritoneal fluid macrophages secreted VEGF in response to ovarian steroids, and this secretion was enhanced after activation with lipopolysaccharide. Peritoneal fluid macrophages expressed receptors for steroid hormones. VEGF receptors flt and KDR (kinase domain receptor) were also detected, suggesting autocrine regulation. During the menstrual cycle, expression of flt was constant but that of KDR was increased in the luteal phase, at which time the cells migrated in response to VEGF. KDR expression and the migratory response were significantly higher in patients with endometriosis. This study demonstrates that activated macrophages are a major source of VEGF in endometriosis and that this expression is regulated directly by ovarian steroids.