Adrenomedullin (AM) is a novel vasodilating peptide involved in the regulation of circulatory homeostasis and implicated in the pathophysiology of cardiovascular disease. We tested the hypothesis that AM also possesses angiogenic properties. Using laser Doppler perfusion imaging, we found that AM stimulated recovery of blood flow to the affected limb in the mouse hind-limb ischemia model. AM exerted this effect in part by promoting expression of vascular endothelial growth factor (VEGF) in the ischemic limb, and immunostaining for CD31 showed the enhanced flow to reflect increased collateral capillary density. By enhancing tumor angiogenesis, AM also promoted the growth of subcutaneously transplanted sarcoma 180 tumor cells. However, heterozygotic AM knockout mice (AM^+/−) showed significantly less blood flow recovery with less collateral capillary development and VEGF expression than their wild-type littermates. Similarly, mice treated with AM22-52, a competitive inhibitor of AM, showed reduced capillary development, and growth of sarcoma 180 tumors was inhibited in AM^+/− and AM22-52–treated mice. Notably, administration of VEGF or AM rescued blood flow recovery and capillary formation in AM^+/− and AM22-52–treated mice. In cocultures of endothelial cells and fibroblasts, AM enhanced VEGF-induced capillary formation, whereas in cultures of endothelial cells AM enhanced VEGF-induced Akt activation. These results show that AM possesses novel angiogenic properties mediated by its ability to enhance VEGF expression and Akt activity. This may make AM a useful therapeutic tool for relieving ischemia; conversely, inhibitors of AM could be useful for clinical management of tumor growth.