Circulating blood–derived vasculogenic cells improve neovascularization of ischemic tissue by a broad repertoire of potential therapeutic actions. Whereas initial studies documented that the cells incorporate and differentiate to cardiovascular cells, other studies suggested that short-time paracrine mechanisms mediate the beneficial effects. The question remains to what extent a physical incorporation is contributing to the beneficial effects of cell therapy. By using the inducible suicide gene thymidine kinase to deplete transplanted cells, we determined the contribution of physical incorporation in 3 animal models. After acute myocardial infarction, depletion of cells 14 days after infusion resulted in a reduction of capillary density and a substantial deterioration of heart function. Likewise, neovascularization of Matrigel plugs and ischemic limbs was significantly suppressed when infused cells were depleted 7 days after infusion. Induction of cell death in the previously transplanted cells reduced perfusion and led to vascular leakage as evidenced by Evans blue extravasation. These results indicate that physical incorporation and persistence of cells contribute to cell-mediated improvement of neovascularization and cardiac function. Long-term paracrine activities and/or cell intrinsic mechanisms may have contributed to the maintenance of functional improvement.