Neuroblastoma is notable for its cellular heterogeneity and unpredictable outcome. Tumors are a variable mixture of primitive malignant neuroblasts, more differentiated ganglionic cells, Schwann and endothelial cells. Although often fatal, neuroblastomas can spontaneously regress, possibly due to favorable autocrine and paracrine interactions among these cells. Here, pigment epithelium-derived factor (PEDF), a potent inhibitor of angiogenesis and inducer of neural differentiation, is shown to be produced by ganglionic cells and Schwann cells, but not by more primitive tumor cells. Although undifferentiated neuroblastoma tumor cell secretions were angiogenic primarily due to vascular endothelial growth factor, secretions of Schwann cells were anti-angiogenic due to PEDF. In addition, PEDF was the major factor responsible for Schwann cell’s ability to induce tumor cell differentiation in vitro and recombinant PEDF had the same effect in vitro and in vivo. Both the growth and the survival of Schwann cells were enhanced by PEDF. Thus PEDF may serve as a multifunctional antitumor agent in neuroblastomas, inhibiting angiogenesis while promoting the numbers of Schwann cells and differentiated tumor cells that in turn produce PEDF, suggesting that its clinical administration could stimulate a multifaceted antitumor feedback loop with the potential to limit and possibly regress tumor growth.