A bicellular vascular population derived from human pluripotent stem cells (hPSCs) undergoes morphogenesis and assembly in a synthetic hydrogel. It is shown that hPSCs can be induced to co-differentiate into early vascular cells (EVCs) in a clinically-relevant strategy dependent upon Notch activation. These EVCs mature into ECs and pericytes, and self-organize to form vascular networks in an engineered matrix. Upon in vivo implantation, multicellular human vascular networks are functionally perfused. Thus, a derived bicellular population is exploited for its intrinsic self-assembly capability to create functional microvasculature in a deliverable matrix.