Benfotiamine, a vitamin B1 analogue, reportedly prevents diabetic microangiopathy. The aim of this study was to evaluate whether benfotiamine is of benefit in reparative neovascularisation using a type I diabetes model of hindlimb ischaemia. We also investigated the involvement of protein kinase B (PKB)/Akt in the therapeutic effects of benfotiamine. Streptozotocin-induced diabetic mice, given oral benfotiamine or vehicle, were subjected to unilateral limb ischaemia. Reparative neovascularisation was analysed by histology. The expression of Nos3 and Casp3 was evaluated by real-time PCR, and the activation state of PKB/Akt was assessed by western blot analysis and immunohistochemistry. The functional importance of PKB/Akt in benfotiamine-induced effects was investigated using a dominant-negative construct. Diabetic muscles showed reduced transketolase activity, which was corrected by benfotiamine. Importantly, benfotiamine prevented ischaemia-induced toe necrosis, improved hindlimb perfusion and oxygenation, and restored endothelium-dependent vasodilation. Histological studies revealed the improvement of reparative neovascularisation and the inhibition of endothelial and skeletal muscle cell apoptosis. In addition, benfotiamine prevented the vascular accumulation of advanced glycation end products and the induction of pro-apoptotic caspase-3, while restoring proper expression of Nos3 and Akt in ischaemic muscles. The benefits of benfotiamine were nullified by dominant-negative PKB/Akt. In vitro, benfotiamine stimulated the proliferation of human EPCs, while inhibiting apoptosis induced by high glucose. In diabetic mice, the number of circulating EPCs was reduced, with the deficit being corrected by benfotiamine. We have demonstrated, for the first time, that benfotiamine aids the post-ischaemic healing of diabetic animals via PKB/Akt-mediated potentiation of angiogenesis and inhibition of apoptosis. In addition, benfotiamine combats the diabetes-induced deficit in endothelial progenitor cells.