Tissue necrosis resulting from critical limb ischemia (CLI) leads to amputation in a significant number of patients. Autologous cell therapy using angiogenic cells such as endothelial progenitor cells (EPCs) holds promise as a treatment for CLI but a limitation of this treatment is that the underlying disease etiology that resulted in CLI may also contribute to dysfunction of the therapeutic EPCs. This study aimed to elucidate the mechanism of EPC dysfunction using diabetes mellitus as a model and to determine whether correction of this defect in dysfunctional EPCs ex vivo would improve the outcome after cell transplantation in the murine hind limb ischemia model. EPC dysfunction was confirmed in a homogenous population of patients with type 1 diabetes mellitus and a microarray study was preformed to identify dysregulated genes. Notably, the secreted proangiogenic protein osteopontin (OPN) was significantly downregulated in diabetic EPCs. Furthermore, OPN-deficient mice showed impaired recovery following hind limb ischemia, suggesting a critical role for OPN in postnatal neovascularization. EPCs isolated from OPN KO mice showed decreased ability to adhere to endothelial cells as well as impaired angiogenic potential. However, this dysfunction was reversed upon exposure to recombinant OPN, suggesting that OPN may act in an autocrine manner on EPCs. Indeed, exposure of OPN knockout (KO) EPCs to OPN was sufficient to induce the secretion of angiogenic proteins (IL-6, TGF-α, and FGF-α). We also demonstrated that vascular regeneration following hind limb ischemia in OPN KO mice was significantly improved upon injection of EPCs preexposed to OPN. We concluded that OPN acts in an autocrine manner on EPCs to induce the secretion of angiogenic proteins, thereby playing a critical role in EPC-mediated neovascularization. Modification of cells by exposure to OPN may improve the efficacy of autologous EPC transplantation via the enhanced secretion of angiogenic proteins.