During embryonic development, the growth of blood vessels requires the coordinated activation of endothelial receptor tyrosine kinases (RTKs) such as VEGFR2 and TIE-2. Similarly, in adulthood, activation of endothelial RTKs has been shown to enhance development of the collateral circulation and improve blood flow to ischemic tissues. Recent evidence suggests that RTK activation is negatively regulated by protein tyrosine phosphatases (PTPs). In this study, we used a non-selective PTP inhibitor, bis(maltolato) oxovanadium IV (BMOV), to test the potential efficacy of PTP inhibition as a means to enhance endothelial RTK activation and improve collateral blood flow. In cultured endothelial cells, pretreatment with BMOV augmented VEGFR2 and TIE-2 tyrosine phosphorylation and enhanced VEGF and Ang1 mediated cell survival. In rat aortic ring explants, BMOV enhanced vessel sprouting, a process that can be influenced by both VEGFR2 and TIE-2 activation. Moreover, 2 weeks of BMOV treatment in a rat model of peripheral vascular disease enhanced collateral blood flow similarly to VEGF and after 4 weeks BMOV was superior to VEGF. Taken together, these studies provide evidence that protein tyrosine phosphatases are important regulators of endothelial receptor tyrosine kinase activation and, for the first time, demonstrate the potential utility of phosphatase inhibition as a means to promote collateral development and enhance collateral blood flow to ischemic tissue.