Retinal angiogenesis was delayed in VSMC-specific Akt1-deficient mice (Akt1) but not in Akt2 mice. The proliferation of ECs, recruitment of pericytes, and coverage of VSMCs to the endothelium were defective in Akt1. The silencing of Akt1 in VSMCs led to the downregulation of angiopoietin 1 (Ang1) and the upregulation of Ang2. The activation of Notch3 in VSMCs was significantly reduced in the retinas of Akt1 mice. Silencing Akt1 suppressed the activation of Notch3. Moreover, the silencing of Notch3 downregulated Ang1, whereas the overexpression of Notch3 intracellular domain (NICD3) enhanced Ang1 expression. The nuclear localization and transcriptional activity of yes-associated protein (YAP) were affected by the expression level of Akt1. Silencing YAP downregulated Ang2 expression, whereas overexpression of YAP showed the opposite results. Ang1 antibody and Ang2 suppressed endothelial sprouting of wild-type aortic tissues, whereas the Ang2 antibody and Ang1 facilitated the endothelial sprouting of aortic tissues from Akt1 mice. Finally, severe hemorrhage was observed in Akt1 mice, which was further facilitated under streptozotocin (STZ)-induced diabetic conditions. Therefore, the Akt1-Notch3/YAP-Ang1/2 signaling cascade in VSMCs might play an essential role in the paracrine regulation of endothelial function.