The forkhead box O1 (FOXO1) is an important transcription factor related to proliferation, metabolism, and homeostasis, while the major phenotype of FOXO1-null mice is abnormal vascular morphology, such as vessel enlargement and dilation. In in vitro mouse embryonic stem cell (ESC)-differentiation system, Foxo1-/- vascular endothelial cells (ECs) fail to elongate, and mimic the abnormalities of FOXO1-deficiency in vivo. Here, we identified the PPP1R14C gene as the FOXO1 target genes responsible for elongating using transcriptome analyses in ESC-derived ECs (ESC-ECs), and found that the FOXO1-PPP1R14C-myosin light chain 2 (MLC2) axis is required for EC elongation during angiogenesis. MLC2 is phosphorylated by MLC kinase (MLCK) and dephosphorylated by MLC phosphatase (MLCP). PPP1R14C is an inhibitor of PP1, the catalytic subunit of MLCP. The abnormal morphology of Foxo1-/- ESC-ECs was associated with low level of PPP1R14C and loss of MLC2 phosphorylation, which were reversed by PPP1R14C-introduction. Knockdown of either FOXO1 or PPP1R14C suppressed vascular cord formation and reduced MLC2 phosphorylation in human ECs (HUVECs). The mouse and human PPP1R14C locus possesses an enhancer element containing conserved FOXO1-binding motifs. In vivo chemical inhibition of MLC2 phosphorylation caused dilated vascular structures in mouse embryos. Furthermore, foxo1 or ppp1r14c-knockdown zebrafish exhibited vascular malformations, which were also restored by PPP1R14C-introduction. Mechanistically, FOXO1 suppressed MLCP activity by up-regulating PPP1R14C expression, thereby promoting MLC2 phosphorylation and EC elongation, which are necessary for vascular development. Given the importance of MLC2 phosphorylation in cell morphogenesis, this study may provide novel insights into the role of FOXO1 in control of angiogenesis.