Cell therapy by autologous mesenchymal stem cells (MSCs) is a clinically acceptable strategy for treating various diseases. Unfortunately, the therapeutic efficacy is largely affected by the low quality of MSCs collected from patients. Here, we showed that the gene expression of MSCs from patients with diabetes was differentially regulated compared to that of MSCs from healthy controls. Then, MSCs were genetically engineered to catalyze an NO prodrug to release NO intracellularly. Compared to extracellular NO conversion, intracellular NO delivery effectively prolonged survival and enhanced the paracrine function of MSCs, as demonstrated by in vitro and in vivo assays. The enhanced therapeutic efficacy of engineered MSCs combined with intracellular NO delivery was further confirmed in mouse and rat models of myocardial infarction, and a clinically relevant cell administration paradigm through secondary thoracotomy has been attempted.