Endothelial dysfunction induced by unordered metabolism results in vascular reconstruction challenges in diabetic lower limb ischemia (DLLI). Mesenchymal stem cells (MSCs) are multipotent secretory cells that are suitable for clinical DLLI treatment, but their use has been hampered by poor survival after injection. Hypoxia can significantly enhance the capacity of MSCs to secrete angiogenic factors. We investigated transient hypoxia pretreatment of MSCs to facilitate revascularization in DLLI. Rat bone marrow MSCs (BM-MSCs) were cultured at different oxygen concentrations for varying time periods. The results indicated that transient pretreatment (5% O2, 48 h) not only increased the expression of VEGF-1α, ANG, HIF-1α and MMP-9 in BM-MSCs as assessed by real-time RT-PCR, but also increased the expression of Bcl-2 as determined by western blotting. The transplantation of pretreated BM-MSCs into rats with DLLI demonstrated accelerated vascular reconstruction when assayed by angiography and immunohistochemistry. CM-Dil-labeled tracer experiments indicated that the survival of BM-MSCs was significantly improved, with approximately 5% of the injected cells remaining alive at 14 days. The expression levels of VEGF-1α, MMP-9 and VEGF-R were significantly increased, and the expression of pAKT was up-regulated in ischemic muscle. Double immunofluorescence studies confirmed that the pretreated BM-MSCs promoted the proliferation and inhibited the apoptosis of endothelial cells. In vitro, pretreated BM-MSCs increased the migratory and tube forming capacity of endothelial cells (ECs). Hypoxia pretreatment of BM-MSCs significantly improved angiogenesis in response to tissue ischemia by ameliorating endothelial cell dysfunction and is a promising therapeutic treatment for DLLI.