Aggf1 is the first gene identified for Klippel-Trenaunay syndrome (KTS), and encodes an angiogenic factor. However, the in vivo roles of Aggf1 are incompletely defined. Here we demonstrate that Aggf1 is essential for both physiological angiogenesis and pathological tumour angiogenesis in vivo. Two lines of Aggf1 knockout (KO) mice showed a particularly severe phenotype as no homozygous embryos were observed and heterozygous mice also showed embryonic lethality (haploinsufficient lethality) observed only for Vegfa and Dll4. Aggf1+/− KO caused defective angiogenesis in yolk sacs and embryos. Survived adult heterozygous mice exhibit frequent haemorrhages and increased vascular permeability due to increased phosphorylation and reduced membrane localization of VE-cadherin. AGGF1 inhibits VE-cadherin phosphorylation, increases plasma membrane VE-cadherin in ECs and in mice, blocks vascular permeability induced by ischaemia-reperfusion (IR), restores depressed cardiac function and contraction, reduces infarct sizes, cardiac fibrosis and necrosis, haemorrhages, edema, and macrophage density associated with IR. Mechanistically, AGGF1 promotes angiogenesis by activating catalytic p110α subunit and p85α regulatory subunit of PI3K, leading to activation of AKT, GSK3β and p70S6K. AKT activation is significantly reduced in heterozygous KO mice and isolated KO ECs, which can be rescued by exogenous AGGF1. ECs from KO mice show reduced capillary angiogenesis, which is rescued by AGGF1 and AKT. Tumour growth/angiogenesis is reduced in heterozygous mice, which was associated with reduced activation of p110α, p85α and AKT. Together with recent identification of somatic mutations in p110α (encoded by PIK3CA), our data establish a potential mechanistic link between AGGF1 and PIK3CA, the two genes identified for KTS.