Advanced age is associated with an increased risk of vascular morbidity, attributable in part to impairments in new blood vessel formation. Mesenchymal stem cells (MSCs) have previously been shown to play an important role in neovascularization and deficiencies in these cells have been described in aged patients. Here we utilize single cell transcriptional analysis to determine the effect of aging on MSC population dynamics. We identify an age-related depletion of a subpopulation of MSCs characterized by a pro-vascular transcriptional profile. Supporting this finding, we demonstrate that aged MSCs are also significantly compromised in their ability to support vascular network formation in vitro and in vivo. Finally, aged MSCs are unable to rescue age-associated impairments in cutaneous wound healing. Taken together, these data suggest that age-related changes in MSC population dynamics result in impaired therapeutic potential of aged progenitor cells. These findings have critical implications for therapeutic cell source decisions (autologous versus allogeneic) and indicate the necessity of strategies to improve functionality of aged MSCs.