Thrombospondin 2 (TSP2) can inhibit angiogenesis in vitro by limiting proliferation and inducing apoptosis of endothelial cells (ECs). TSP2 can also modulate the extracellular levels of gelatinases (matrix metalloproteases, MMPs) and potentially influence the remodeling of the extracellular matrix (ECM). Here, we tested the hypothesis that by regulating MMPs, TSP2 could alter EC-ECM interactions. By using a three-dimensional angiogenesis assay, we show that TSP2, but not TSP1, limited angiogenesis by decreasing gelatinolytic activity in situ. Furthermore, TSP2-null fibroblast-derived ECM, which contains irregular collagen fibrils, was more permissive for EC migration. Investigation of the role of TSP2 in physiological angiogenesis in vivo, using excision of the left femoral artery in both TSP2-null and wild-type mice, revealed that TSP2-null mice displayed accelerated recovery of blood flow. This increase was attributable, in part, to an enhanced arterial network in TSP2-null muscles of the upper limb. Angiogenesis in the lower limb was also increased and was associated with increased MMP-9 deposition and gelatinolytic activity. The observed changes correlated with the temporal expression of TSP2 in the ischemic muscle of wild-type mice. Taken together, our observations implicate the matrix-modulating activity of TSP2 as a mechanism by which physiological angiogenesis is inhibited.