The REGγ-proteasome serves as a short-cut for the destruction of certain intact mammalian proteins in the absence of ubiquitin-and ATP. The biological roles of the proteasome activator REGγ are not completely understood. Here we demonstrate that REGγ controls degradation of protein kinase A catalytic subunit-α (PKAca) both in primary human umbilical vein endothelial cells (HUVECs) and mouse embryonic fibroblast cells (MEFs). Accumulation of PKAca in REGγ-deficient HUVECs or MEFs results in phosphorylation and nuclear exclusion of the transcription factor FoxO1, indicating that REGγ is involved in preserving FoxO1 transcriptional activity. Consequently, VEGF-induced expression of the FoxO1 responsive genes, VCAM-1 and E-Selectin, was tightly controlled by REGγ in a PKA dependent manner. Functionally, REGγ is crucial for the migration of HUVECs. REGγ−/− mice display compromised VEGF-instigated neovascularization in cornea and aortic ring models. Implanted matrigel plugs containing VEGF in REGγ−/− mice induced fewer capillaries than in REGγ+/+ littermates. Taken together, our study identifies REGγ as a novel angiogenic factor that plays an important role in VEGF-induced expression of VCAM-1 and E-Selectin by antagonizing PKA signaling. Identification of the REGγ–PKA–FoxO1 pathway in endothelial cells (ECs) provides another potential target for therapeutic intervention in vascular diseases.