Endostatin is an anti‐angiogenic factor that inhibits endothelial cell (EC) migration and induces EC apoptosis. Because nitric oxide (NO) plays a key role in vascular endothelial growth factor (VEGF)‐induced angiogenesis, we hypothesized that endostatin interferes with the activation of the endothelial NO synthase (eNOS). Human recombinant endostatin significantly reduced VEGF‐induced NO‐release, which suggests that endostatin inhibits eNOS activation. Because the activation of eNOS by VEGF is associated with the Akt‐dependent phosphorylation of eNOS at Ser1177, we investigated whether endostatin interferes with phosphorylation of eNOS. Endostatin reduced VEGF‐induced phosphorylation of eNOS at Ser1177, whereas Akt phosphorylation was not affected. Coinciding with the inhibition of eNOS phosphorylation, endostatin completely blocked VEGF‐induced EC migration. The NO‐donor SNAP reversed the inhibitory effect of endostatin on EC migration. In addition, endostatin significantly inhibited VEGF‐induced tube formation, whereas endostatin did not affect tube formation induced by NO. Finally, a non‐dephosphorylatable constitutive active eNOS construct (S1177D), but not constitutive active Akt, abolished the inhibitory effect of endostatin on EC migration. Endostatin activated PP2A, which is known to directly dephosphorylate eNOS at Ser1177. Inhibition of PP2A prevented the inhibitory effect of endostatin. Thus, endostatin inhibits VEGF‐induced EC migration and angiogenesis upstream of NO‐synthesis via dephosphorylation of eNOS at Ser1177.