We have examined the cellular mechanisms by which heparin potentiates the ability of 3T3‐adipocytes to stimulate the formation of new blood vessels. Both anticoagulant and non‐anticoagulant heparin species enhanced the angiogenic activity of adipocyte‐secreted products in the chick chorioallantoic membrane assay, indicating that the angiotropic effect of this glycosaminoglycan is independent of its effect on the coagulation cascade. Heparin alone was unable to produce a neovascular response. The ability of heparin to modulate three endothelial functions in vitro thought to be related to angiogenesis were examined: protease activity, motility, and mitogenesis. Heparin caused a 100% increase in the adipocyte‐induced stimulation of endothelial cell plasminogen activator activity and motility, but had no effect on proliferation. The enhancement of plasminogen activator and chemoattractant activities had a similar ED50 (1‐2 μg/ml) and optimum dose (10‐30 μg/ml). When we examined the direct effect of heparin on the activity of two distinct plasminogen activator enzymes–urokinase and tissue‐type–a dual action of heparin was observed: tissue‐type enzyme activity was stimulated 100% by heparin at 10 μg/ml, whereas urokinase activity was inhibited by 77% at this dose. These data suggest that heparin potentiates angiogenesis in vivo by stimulating endothelial cell plasminogen activator, motility, or both. Our results further suggest that for adipocyte‐induced blood vessel formation, in contrast to other angiogenesis systems, heparin does not appear to affect the mitogenic activity.