Diabetes is characterized by poor circulation and impaired angiogenesis, which appear to contribute to the frequent skin lesions and poor wound healing common in diabetic patients. Therapies to improve circulation commonly improve wound healing in diabetic patients. Administration of circulating CD34+ cells, cells that can function as endothelial cell progenitors, accelerates blood flow restoration to ischemic limbs of diabetic mice. We have investigated the potential of these cells to accelerate revascularization and healing in full-thickness skin wounds of hypoinsulinemic (streptozotocin-treated) diabetic mice. Wounds were injected with human CD34+ or CD34–peripheral blood mononuclear cells or no cells, and analyzed for vascularity and healing at various times thereafter. Treatment with CD34+ enriched cells decreased wound size by 4 days after treatment, accelerated epidermal healing, and rapidly and dramatically accelerated revascularization of the wounds compared to controls. Initially increased vascularization was mediated principally by an increase in vessel diameter, but later, both an increase in vascular size and number were observed. These findings indicate that blood-derived progenitors may have therapeutic potential in the treatment of skin lesions in the setting of diabetes, and give insights into how bone marrow cells exert their effects on neovascularization.