Disclosed herein is a method for developing human endothelial cells (ECs) from human embryonic stem cells (ESCs). The method is based on inhibition of TGF signaling following mesoderm induction and during vascular differentiation of hESC-derived cells. Also disclosed herein is a substantially pure and stable population of ECs that maintains a high degree of proliferation and phenotypic homogeneity for extended culture periods. Related pharmaceutical compositions and therapeutic methods are also disclosed. A reporter hESC line useful for tracking the development of ECs is also provided.