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Blood vessel endothelium has been recently shown to induce endocrine pancreatic development. Because pancreatic endocrine cells or islets express high levels of vascular endothelial growth factors, VEGFs, we investigated the role of a particular VEGF, VEGF-A, on islet vascularization and islet function. By deleting VEGF-A in the mouse pancreas, we show that endocrine cells signal back to the adjacent endothelial cells to induce the formation of a dense network of fenestrated capillaries in islets. Interestingly, VEGF-A is not required for the development of all islet capillaries. However, the few remaining capillaries found in the VEGF-A-deficient islets are not fenestrated and contain an unusual number of caveolae. In addition, glucose tolerance tests reveal that the VEGF-A-induced capillary network is not strictly required for blood glucose control but is essential for fine-tuning blood glucose regulation. In conclusion, we speculate that islet formation takes place in two sequential steps: in the first step, signals from blood vessel endothelium induce islet formation next to the vessels, and in the second step, the islets signal to the endothelium. The second step involves paracrine VEGF-A signaling to elaborate the interaction of islets with the circulatory system.