We investigated the role of pericytes in retinal neovascularization and the effect of hypoxia on it. Conditioned media (CM) were harvested from cultured pericytes, retinal capillary endothelial cells (RCEs) or cocultured pericytes and RCEs at 1, 5 and 20% O2. The effect of these CM on the capillary-like tube formation of RCEs in the collagen gel was then investigated. The CM harvested from either pericytes or coculture of pericytes and RCEs in a hypoxic environment (1 and 5% O2) significantly enhanced the tube formation of RCEs (p < 0.01), while the CM of coculture at 20% O2 showed an inhibitory effect (p < 0.01). The present study suggests that pericytes release angiogenic factors under hypoxic conditions, i.e. at 1 and 5% O2, while they release angiostatic factors when they are cocultured with RCEs at 20% O2.