Paracrine interactions between endothelial cells (EC) and mural cells act as critical regulators of vessel wall assembly, vessel maturation and define a plasticity window for vascular remodeling. The present study was aimed at studying blood vessel maturation processes in a novel 3-dimensional spheroidal coculture system of EC and smooth muscle cells (SMC). Coculture spheroids differentiate spontaneously in a calcium-dependent manner to organize into a core of SMC and a surface layer of EC, thus mimicking the physiological assembly of blood vessels with surface lining EC and underlying mural cells. Coculture of EC with SMC induces a mature, quiescent EC phenotype as evidenced by 1) a significant increase in the number of junctional complexes of the EC surface layer, 2) a down-regulation of PDGF-B expression by cocultured EC, and 3) an increased resistance of EC to undergo apoptosis. Furthermore, EC cocultured with SMC become refractory to stimulation with VEGF (lack of CD34 expression on VEGF stimulation; inability to form capillary-like sprouts in a VEGF-dependent manner in a 3-dimensional in gel angiogenesis assay). In contrast, costimulation with VEGF and Ang-2 induced sprouting angiogenesis originating from coculture spheroids consistent with a model of Ang-2-mediated vessel destabilization resulting in VEGF responsiveness. Ang-2 on its own was able to stimulate endothelial cells in the absence of Ang-1 producing SMC, inducing lateral sheet migration as well as in gel sprouting angiogenesis. Taken together, the data establish the spheroidal EC/SMC system as a powerful cell culture model to study paracrine interactions in the vessel wall and provide functional evidence for smooth muscle cell-mediated quiescence effects on endothelial cells.