The receptor tyrosine kinase EphB4 and its ligand EphrinB2 play a crucial role in vascular development during embryogenesis. The soluble monomeric derivative of the extracellular domain of EphB4 (sEphB4) was designed as an antagonist of EphB4/EphrinB2 signaling. sEphB4 blocks activation of EphB4 and EphrinB2; suppresses endothelial cell migration, adhesion, and tube formation in vitro; and inhibits the angiogenic effects of various growth factors (VEGF and bFGF) in vivo. sEphB4 also inhibits tumor growth in murine tumor xenograft models. sEphB4 is thus a therapeutic candidate for vascular proliferative diseases and cancer.