Carcinoembryonic antigen cell adhesion molecule-1 (CEACAM1) is an immunoglobulin-like cell surface co-receptor expressed on epithelial, hematopoietic and endothelial cells. CEACAM1 functions as an adhesion molecule, mainly binding to itself or other members of the CEA family. We and others have previously shown that CEACAM1 is crucial for in vivo vascular integrity during ischemic neo-vascularization. Here, we have deciphered the roles of CEACAM1 in normal and pathological vascularization. We have found that Ceacam1-/- mice exhibit a significant increase in basal vascular permeability related to increased basal Akt and endothelial nitric oxide synthase (eNOS) activation in primary murine lung endothelial cells (MLECs). Moreover, CEACAM1 deletion in MLECs inhibits VEGF-mediated nitric oxide (NO) production, consistent with defective VEGF-dependent in vivo permeability in Ceacam1-/- mice. In addition, Ceacam1-null mice exhibit increased permeability of tumor vasculature. Finally, we demonstrate that CEACAM1 is tyrosine-phosphorylated upon VEGF treatment in a SHP-1- and Src-dependent manner, and that the key residues of the long cytoplasmic domain of CEACAM1 are crucial for CEACAM1 phosphorylation and NO production. This data represents the first report, to our knowledge, of a functional link between CEACAM1 and the VEGFR2/Akt/eNOS-mediated vascular permeability pathway.