Endothelial cells show surprising cell rearrangement behaviour during angiogenic sprouting; however, the underlying mechanisms and functional importance remain unclear. By combining computational modelling with experimentation, we identify that Notch/VEGFR-regulated differential dynamics of VE-cadherin junctions drive functional endothelial cell rearrangements during sprouting. We propose that continual flux in Notch signalling levels in individual cells results in differential VE-cadherin turnover and junctional-cortex protrusions, which powers differential cell movement. In cultured endothelial cells, Notch signalling quantitatively reduced junctional VE-cadherin mobility. In simulations, only differential adhesion dynamics generated long-range position changes, required for tip cell competition and stalk cell intercalation. Simulation and quantitative image analysis on VE-cadherin junctional patterning in vivo identified that differential VE-cadherin mobility is lost under pathological high VEGF conditions, in retinopathy and tumour vessels. Our results provide a mechanistic concept for how cells rearrange during normal sprouting and how rearrangement switches to generate abnormal vessels in pathologies.