Although the importance of fluid flow for proper vascular development and function in vivo is well recognized, microvascular formation in response to flow has not been well evaluated in a three-dimensional (3D) environment in vitro. In this study, we developed a novel 3D in vitro perfusion system that allows direct investigation of the effects of shear stress on the development of microvasculature in vitro. This system utilizes a 3D collagen gel for suspension of vascular cells and mesenchymal stem cells, through which flow is directly perfused. We characterized the flow conditions and demonstrate the impact of flow on the development of microvasculature using a coculture of endothelial cells and mesenchymal stem cells. With the unique ability to apply bulk flow through the collagen gels, and to estimate shear stress within the constructs, this perfusion system provides a flexible platform for developing a controllable biomimetic environment that can be adapted for a variety of investigations of microvascularization.