A missense mutation from arginine to tryptophan at residue 849 in the kinase domain of Tie2 (Tie2-R849W) is commonly identified in familial venous malformations. The mechanistic action of Tie2-R849W variant expression on angiogenic cascades including smooth muscle cell recruitment, however, remains elusive. To avoid confounding factors from endogenous Tie2 expression, Tie2-depleted endothelial cells (ECs) were used to study the effects of ectopic shRNA-resistant Tie2 variant expression, Tie2-WT* and Tie2-R849W*, on vascular cell proliferation, migration, tube formation, and smooth muscle cell (SMC) recruitment. Tie2-R849W* induced STAT1 phosphorylation at Tyr701. Tie2-R849W*-expressing cells had reduced ability to migrate and form tubes on Matrigel than their wildtype counterparts. STAT1 phosphorylation attenuated VEGF-A-induced STAT3 tyrosine phosphorylation in Tie2-R849W*-expressing HUVECs. The induced STAT1 activation also decreased VEGF-A-induced bFGF mRNA expression by competing with activated STAT3 for a direct binding to the consensus STAT-binding site at positions −997 to −989 bp from transcription start site in the bFGF promoter. Depleting STAT1 expression rescued the inability of Tie2-R849W expression to mediate angiogenesis. Moreover, bFGF neutralization or constitutive STAT1 activation, reminiscence of Tie2-R849W* expression, suppressed the smooth muscle cell recruiting ability of endothelial conditioned medium. This work reveals an anti-angiogenic role of STAT1 activation that acts in Tie2-R849W-expressing ECs to impair VEGF-A-mediated STAT3 signaling, bFGF production, and smooth muscle cell recruitment. A balancing activity of STAT1 and STAT3 may be important for Tie2-mediated vascular homeostasis.