The angiopoietin/Tie (ANG/Tie) receptor system controls developmental and tumor angiogenesis, inflammatory vascular remodeling, and vessel leakage. ANG1 is a Tie2 agonist that promotes vascular stabilization in inflammation and sepsis, whereas ANG2 is a context-dependent Tie2 agonist or antagonist. A limited understanding of ANG signaling mechanisms and the orphan receptor Tie1 has hindered development of ANG/Tie-targeted therapeutics. Here, we determined that both ANG1 and ANG2 binding to Tie2 increases Tie1-Tie2 interactions in a β1 integrin–dependent manner and that Tie1 regulates ANG-induced Tie2 trafficking in endothelial cells. Endothelial Tie1 was essential for the agonist activity of ANG1 and autocrine ANG2. Deletion of endothelial Tie1 in mice reduced Tie2 phosphorylation and downstream Akt activation, increased FOXO1 nuclear localization and transcriptional activation, and prevented ANG1- and ANG2-induced capillary-to-venous remodeling. However, in acute endotoxemia, the Tie1 ectodomain that is responsible for interaction with Tie2 was rapidly cleaved, ANG1 agonist activity was decreased, and autocrine ANG2 agonist activity was lost, which led to suppression of Tie2 signaling. Tie1 cleavage also occurred in patients with hantavirus infection. These results support a model in which Tie1 directly interacts with Tie2 to promote ANG-induced vascular responses under noninflammatory conditions, whereas in inflammation, Tie1 cleavage contributes to loss of ANG2 agonist activity and vascular stability.