Growth factor gradients regulate many developmental processes. VEGF-A is distributed in a graded fashion in growing tissues in order to direct sprouting of new vessels. Growth factor gradients can be formed by regulated production, retention, controlled release and degradation. VEGF-A production is controlled by hypoxia while its retention depends on the C-terminal heparin-binding motifs present in the longer splice-isoforms, VEGF164 and 188. This motif confers binding to the cell surface and the surrounding extracelluar matrix. The short isoform VEGF120 is diffusible and hence fails to direct endothelial tip cell migration. Conditional inactivation of heparan sulfate proteoglycans in the cells that produce VEGF results similarly in misguidance of the tip cells. Studying retinal developmental angiogenesis and pathological neovascularization side-by-side in the mouse retina, we find that endothelial tip cell guidance and stalk cell proliferation control are disrupted in neovascularization due to a loss of VEGF-A retention. The cause for this is proteolytic cleavage of VEGF-A by matrix metalloproteases (MMP) derived mostly from macrophages infiltrating the ischaemic retinal areas. Genetic or pharmacological inhibition of macrophage infiltration or MMP activity can rescue guided revascularization at the expense of pre-retinal neovascularization. Disruption of VEGF-A gradients provides a novel concept for the mechanism underlying pathological patterning in ocular disease.