Studies on mechanisms underlying the differentiation of dental pulp stem cells are critical for the understanding of the biology of odontogenesis and for dental tissue engineering. Here, we tested the hypothesis that stem cells from exfoliated deciduous teeth (SHED) differentiate into functional odontoblasts and endothelial cells. SHED were seeded in tooth slice/scaffolds and implanted subcutaneously into immunodeficient mice. SHED differentiated into functional odontoblasts that generated tubular dentin, as determined by tetracycline staining and confocal microscopy. These cells also differentiated into vascular endothelial cells, as determined by beta-galactosidase staining of LacZ-tagged SHED. In vitro, vascular endothelial growth factor (VEGF) induced SHED to express VEGFR2, CD31, and VE-Cadherin (markers of endothelium) and to organize into capillary-like sprouts. VEGF induced ERK and AKT phosphorylation (indicative of differentiation), while inhibiting phosphorylation of STAT3 (indicative of 'stemness'). Collectively, this work demonstrates that SHED can differentiate into angiogenic endothelial cells and odontoblasts capable of generating tubular dentin.