Embryonic stem cells (ES cells), the pluripotent derivatives of the inner cell mass from blastocysts, have the capacity for unlimited growth, self-renewal and differentiation toward all types of somatic cells. Angiotensin II (Ang II), the most important effector peptide of the renin-angiotensin system, is also an angiogenesis factor. However, the potential impact of Ang II on ES cell differentiation is still unknown. In the present study, we have successfully induced the differentiation of ES cells into smooth muscle cells (SMCs) on collagen IV. Interestingly, incubation of ES cells with Ang II further promoted SMC differentiation from ES cells, which was abolished by prior treatment with Ang II type 1 (AT1) receptor antagonist losartan, but not Ang II type 2 (AT2) receptor antagonist PD123319. Moreover, we found that, in parallel with SMC specific-marker induction, the expression levels of phosphoAkt and NF-Kappa B (NF-κB) p50 were up-regulated by Ang II. Importantly, addition of phosphoinositide-3 kinase (PI3K) inhibitor LY294002 led to a marked inhibition of Ang II induced SMC specific markers, phosphoAkt and NF-κB p50 expression. Furthermore, NF-κB inhibitor BAY11-7082 can inhibit Ang II induced expression of SMC specific markers. Thus, we demonstrate for the first time that Ang II plays a promotive role in the stage of ES cell differentiation to SMCs through AT1 receptor. We further confirmed that PI3K/Akt signaling pathway and NF-κB play key roles in this process.