The EphB4 receptor tyrosine kinase together with its preferred ligand, ephrin-B2, regulates a variety of physiological and pathological processes, including tumor progression, pathological forms of angiogenesis, cardiomyocyte differentiation and bone remodeling. We previously reported the identification of TNYL-RAW, a 15 amino acid-long peptide that binds to the ephrin-binding pocked of EphB4 with low nanomolar affinity and inhibits ephrin-B2 binding. Although ephrin-B2 interacts promiscuously with all the EphB receptors, the TNYL-RAW peptide is remarkably selective and only binds to EphB4. Therefore, this peptide is a useful tool for studying the biological functions of EphB4 and for imaging EphB4-expressing tumors. Furthermore, TNYL-RAW could be useful for treating pathologies involving EphB4-ephrin-B2 interaction. However, the peptide has a very short half-life in cell culture and in the mouse blood circulation due to proteolytic degradation and clearance by the kidneys and reticuloendothelial system. To overcome these limitations, we have modified TNYL-RAW by fusion with the Fc portion of human IgG1, complexation with streptavidin or covalent coupling to a 40 KDa branched polyethylene glycol (PEG) polymer. These modified forms of TNYL-RAW all have greatly increased stability in cell culture, while retaining high binding affinity for EphB4. Furthermore, PEGylation most effectively increases peptide half-life in vivo. Consistent with increased stability, submicromolar concentrations of PEGylated TNYL-RAW effectively impair EphB4 activation by ephrin-B2 in cultured B16 melanoma cells as well as capillary-like tube formation and capillary sprouting in co-cultures of endothelial and epicardial mesothelial cells. Therefore, PEGylated TNYL-RAW may be useful for inhibiting pathological forms of angiogenesis through a novel mechanism involving disruption of EphB4-ephrin-B2 interactions between endothelial cells and supporting perivascular mesenchymal cells. Furthermore, the PEGylated peptide is suitable for other cell culture and in vivo applications requiring prolonged EphB4 receptor targeting.