Peripheral arterial disease (PAD) is a debilitating complication of diabetes mellitus (DM) that leads to thousands of injuries, amputations, and deaths each year. The use of mesenchymal stem cells (MSCs) as a regenerative therapy holds the promise of regrowing injured vasculature, helping DM patients live healthier and longer lives. We report the use of muscle-derived MSCs to treat surgically-induced hindlimb ischemia in a mouse model of type 1 diabetes (DM-1). We serially evaluate several facets of the recovery process, including αVβ3 -integrin expression (a marker of angiogenesis), blood perfusion, and muscle function. We also perform microarray transcriptomics experiments to characterize the gene expression states of the MSC-treated is- chemic tissues, and compare the results with those of non-ischemic tissues, as well as ischemic tissues from a saline-treated control group. The results show a multifaceted impact of mMSCs on hindlimb ischemia. We determined that the angiogenic activity one week after mMSC treatment was enhanced by approximately 80% relative to the saline group, which resulted in relative increases in blood perfusion and muscle strength of approximately 42% and 1.7-fold, respectively. At the transcriptomics level, we found that several classes of genes were affected by mMSC treatment. The mMSCs appeared to enhance both pro-angiogenic and metabolic genes, while suppressing anti-angiogenic genes and certain genes involved in the inflammatory response. All told, mMSC treatment appears to exert far-reaching effects on the microenvironment of ischemic tissue, enabling faster and more complete recovery from vascular occlusion.