The G-protein-coupled receptors of the endothelial differentiation gene (EDG) family mediate pro-angiogenic activities, such as endothelial cell proliferation, chemotaxis, and vessel morphogenesis. We synthesized and tested the effects of a 9-amino acid peptide (KRX-725), derived from the second intracellular loop of S1P3 (EDG3). KRX-725 mimics the effects of sphingosine 1-phosphate (S1P), the natural ligand of S1P3, by triggering a Gi-dependent MEK-ERK (mitogen-activated protein kinase kinase and extracellular signal-regulated kinase) signal transduction pathway. Using aortic rings as an ex vivo model of angiogenesis, vascular sprouting was assessed in the presence of KRX-725 or S1P. KRX-725 induced extensive and dense vascular sprouts, which contain an elaborated organization of endothelial and smooth muscle layers, including lumen formation. When KRX-725 or S1P was combined with proangiogenic factors, such as basic fibroblast growth factor (bFGF), stem cell factor, or vascular endothelial growth factor, the effect was synergistic, leading to further enhancement of vascular sprouting. KRX-725 also initiated neovascularization in a mouse corneal pocket assay in vivo and showed synergism with bFGF. The specificity of KRX-725 was demonstrated via peptide-induced receptor internalization of S1P3 but not S1P1. The ability of a short peptide to stimulate extensive angiogenesis and to synergize with pro-angiogenic factors suggests that KRX-725 may serve as a useful agent in treating pathologic conditions such as peripheral vascular disease, cardiac ischemia, or tissue grafts.