Low oxygen tension is a critical regulator of the developing or regenerating vasculature. The present invention is based on the determination that low oxygen tension during early stages of early vascular cell (EVC) derivation induces endothelial commitment and maturation of pluripotent stem cells. Inhibition of reactive oxygen species generation during the early stages of differentiation abrogates the endothelial inductive effects of the low oxygen environments. Methods of generating various types of cells from pluripotent stem cells (PSCs) are described, as well as compositions and methods of use thereof. In particular, generation of EVCs, bicellular vascular populations, early endothelial cells (ECs) and pericytes via culture in a low oxygen environment is described.
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