Delayed diabetic wound healing is, in part, the result of inadequate endothelial progenitor cell (EPC) proliferation, mobilization, and trafficking. Recently, we developed a serum-free functional culture system called the quality and quantity culture (QQc) system that enhances the number and vasculogenic potential of EPCs. We hypothesize that QQc restoration of diabetic EPC function will improve wound closure. To test this hypothesis, we measured diabetic c-kit(+)Sca-1(+)lin(-) (KSL) cell activity in vitro as well as the effect of KSL cell-adoptive transfer on the rate of euglycemic wound closure before and after QQc. KSL cells were magnetically sorted from control and streptozotocin-induced type I diabetic C57BL6J bone marrow. Freshly isolated control and diabetic KSL cells were cultured in QQc for 7 days and pre-QQc and post-QQc KSL function testing. The number of KSL cells significantly increased after QQc for both diabetic subjects and controls, and diabetic KSL increased vasculogenic potential above the fresh control KSL level. Similarly, fresh diabetic cells form fewer tubules, but QQc increases diabetic tubule formation to levels greater than that of fresh control cells (P < 0.05). Adoptive transfer of post-QQc diabetic KSL cells significantly enhances wound closure compared with fresh diabetic KSL cells and equaled wound closure of post-QQc control KSL cells. Post-QQc diabetic KSL enhancement of wound closure is mediated, in part, via a vasculogenic mechanism. This study demonstrates that QQc can reverse diabetic EPC dysfunction and achieve control levels of EPC function. Finally, post-QQc diabetic EPC therapy effectively improved euglycemic wound closure and may improve diabetic wound healing.