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E ndothelial progenitor cells (EPCs) are essential in vasculogenesis and wound healing, but their circulating and wound level numbers are decreased in diabetes. This study aimed to determine mechanisms responsible for the diabetic defect in circulating and wound EPCs. Since mobilization of BM EPCs occurs via eNOS activation, we hypothesized that eNOS activation is impaired in diabetes, which results in reduced EPC mobilization. Since hyperoxia activates NOS in other tissues, we investigated whether hyperoxia restores EPC mobilization in diabetic mice through BM NOS activation. Additionally, we studied the hypothesis that impaired EPC homing in diabetes is due to decreased wound level stromal cell–derived factor–1α (SDF-1α), a chemokine that mediates EPC recruitment in ischemia. Diabetic mice showed impaired phosphorylation of BM eNOS, decreased circulating EPCs, and diminished SDF-1α expression in cutaneous wounds. Hyperoxia increased BM NO and circulating EPCs, effects inhibited by the NOS inhibitor N-nitro-l-arginine-methyl ester. Administration of SDF-1α into wounds reversed the EPC homing impairment and, with hyperoxia, synergistically enhanced EPC mobilization, homing, and wound healing. Thus, hyperoxia reversed the diabetic defect in EPC mobilization, and SDF-1α reversed the diabetic defect in EPC homing. The targets identified, which we believe to be novel, can significantly advance the field of diabetic wound healing.