We identified Ras guanine-releasing protein 3 (RasGRP3) as a guanine exchange factor expressed in blood vessels via an embryonic stem (ES) cell-based gene trap screen to identify novel vascular genes. RasGRP3 is expressed in embryonic blood vessels, down-regulated in mature adult vessels, and reexpressed in newly formed vessels during pregnancy and tumorigenesis. This expression pattern is consistent with an angiogenic function for RasGRP3. Although a loss-of-function mutation in RasGRP3 did not affect viability, RasGRP3 was up-regulated in response to vascular endothelial growth factor (VEGF) stimulation of human umbilical vein endothelial cells, placing RasGRP3 regulation downstream of VEGF signaling. Phorbol esters mimic the second messenger diacylglycerol (DAG) in activating both protein kinase C (PKC) and non-PKC phorbol ester receptors such as RasGRP3. ES cell-derived wild-type blood vessels exposed to phorbol myristate acetate (PMA) underwent extensive aberrant morphogenesis that resulted in the formation of large endothelial sheets rather than properly branched vessels. This response to PMA was completely dependent on the presence of RasGRP3, as mutant vessels were refractory to the treatment. Taken together, these findings show that endothelial RasGRP3 is up-regulated in response to VEGF stimulation and that RasGRP3 functions as an endothelial cell phorbol ester receptor in a pathway whose stimulation perturbs normal angiogenesis. This suggests that RasGRP3 activity may exacerbate vascular complications in diseases characterized by excess DAG, such as diabetes.