The present study was conducted to elucidate the role of activin A in capillary formation. When bovine aortic endothelial cells (BAEC) were cultured in a collagen gel, basic fibroblast growth factor (FGF-2) induced tube formation. Activin A also induced tube formation and the addition of two factors together was more effective. BAEC produced both FGF-2 and activin A as autocrine factors. Exogenous FGF-2 did not affect the production of activin A but instead upregulated the type II activin receptor. On the other hand, activin A increased the expression of FGF-2 as well as the FGF receptor. Most importantly, when the action of endogenous activin A was blocked by adding follistatin, the tubulogenic action of FGF-2 was nearly completely inhibited. Activin-induced tubulogenesis was markedly inhibited by overexpression of Smad7, an inhibitory Smad. Similarly, an inhibitor of p44/42 mitogen-activated protein (MAP) kinase attenuated the activin-mediated tubulogenesis, whereas an inhibitor of p38 MAP kinase had no effect. These results indicate that FGF-2 and activin A enhance their signals each other in BAEC, and endogenous activin A is critical for FGF-2-induced capillary formation.