Amniotic fluid-derived stem cells (AFSCs) are a unique stem cell source that may have great potential for use in tissue engineering (TE) due to their pluripotentiality. AFSCs have previously shown angiogenic potential and may present an alternative cell source for endothelial-like cells that could be used in range of applications, including the pre-vascularisation of TE constructs and the treatment of ischaemic diseases. This study investigated the ability of these cells to differentiate down an endothelial lineage with the aim of producing an endothelial-like cell suitable for use in pre-vascularisation. As hypoxia and the associated HIF-1 pathway have been implicated in the induction of angiogenesis in a number of biological processes, it was hypothesised that culture in hypoxic conditions could enhance the endothelial differentiation of AFSCs. The cells were cultured in endothelial cell media supplemented with 50 ng mL−1 of VEGF, maintained in normoxia, intermittent hypoxia or continuous hypoxia and assessed for markers of endothelial differentiation at day 7 and 14. The results demonstrated that AFSCs subjected to these culture conditions display an endothelial gene expression profile and adopted functional endothelial cell characteristics indicative of early endothelial differentiation. Culture in continuous hypoxia enhanced endothelial gene expression but did not enhance functional endothelial cell characteristics. Overall, AFSCs subjected to endothelial stimuli demonstrated a less mature endothelial gene expression profile and phenotype when compared with HUVECs, the endothelial cell control. However, this study is the first time that the positive effect of an extended period of continuous hypoxic culture on endothelial differentiation in AFSCs has been demonstrated.