Despite advances in diabetic wound care, the significant number of amputations that occur every year demands more effective therapeutics. Herein, we offer an aminated polyethersulfone nanofiber-expanded human umbilical cord blood-derived CD34+ cells (henceforth CD34+ cells) effective therapy, tested in cutaneous wounds developed in streptozotocin-induced diabetic NOD/SCID mice. We show that systemic administration of CD34+ cells homed to the wound site and significantly accelerated wound closure. Wound closure was associated with improved re-epithelialization and increased neovascularization; and with decreased sustained pro-inflammatory activity of NF-κB and its downstream effector molecules TNF-α, IL-1β, and IL-6 at the wound bed. This finding was further supported by the observation of a decreased number of myeloperoxidase positive neutrophils, and concomitantly increased levels of IL-10. In addition, improved granulation tissue formation was observed along with higher collagen deposition and myofibroblasts and decreased expressions of MMP-1. Mechanistically, CD34+ cells reduced the level of MMP-1 expression by inhibiting recruitment of NF-κB to the MMP-1 promoter site in dermal fibroblasts. In summary, we provide evidence of a novel nanofiber-expanded CD34+ stem cell therapeutic development for treating diabetic wounds by defining their cellular and molecular mechanisms.