Astrocyte-elevated gene-1 (AEG-1) expression is increased in multiple cancers and plays a central role in Ha-ras-mediated oncogenesis through the phosphatidylinositol 3-kinase (PI3K)/Akt signaling pathway. Additionally, overexpression of AEG-1 protects primary and transformed human and rat cells from serum starvation-induced apoptosis through activation of PI3K/Akt signaling. These findings suggest, but do not prove, that AEG-1 may function as an oncogene. We now provide definitive evidence that AEG-1 is indeed a transforming oncogene and show that stable expression of AEG-1 in normal immortal cloned rat embryo fibroblast (CREF) cells induces morphological transformation and enhances invasion and anchorage-independent growth in soft agar, two fundamental biological events associated with cellular transformation. Additionally, AEG-1-expressing CREF clones form aggressive tumors in nude mice. Immunohistochemistry analysis of tumor sections demonstrates that AEG-1-expressing tumors have increased microvessel density throughout the entire tumor sections. Overexpression of AEG-1 increases expression of molecular markers of angiogenesis, including angiopoietin-1, matrix metalloprotease-2, and hypoxia-inducible factor 1-alpha. In vitro angiogenesis studies further demonstrate that AEG-1 promotes tube formation in Matrigel and increases invasion of human umbilical vein endothelial cells via the PI3K/Akt signaling pathway. Tube formation induced by AEG-1 correlates with increased expression of angiogenesis markers, including Tie2 and hypoxia-inducible factor-alpha, and blocking AEG-1-induced Tie2 with Tie2 siRNA significantly inhibits AEG-1-induced tube formation in Matrigel. Overall, our findings demonstrate that aberrant AEG-1 expression plays a dominant positive role in regulating oncogenic transformation and angiogenesis. These findings suggest that AEG-1 may provide a viable target for directly suppressing the cancer phenotype.