Peripheral arterial disease (PAD), which affects about 10 million Americans, is typically due to atherosclerotic arterial occlusive disease of the limbs and is associated with dysfunctional vascular endothelium. Cell-based therapy using endothelial cells derived from embryonic stem cells (ESC-ECs) is a promising approach for regenerating the endothelium. However, studies that characterize the localization and engraftment of embryonic stem cells (ESCs) and ESC-ECs into the ischemic limb are limited. In this study, we examined the survival, localization, and functional effects of exogenously administered ESC-ECs for repair of hindlimb ischemia, which is a murine model of PAD. Murine ESCs or ESC-ECs were stably transduced with a construct for bioluminescence imaging (BLI) and fluorescent detection. In a syngenic murine model of hindlimb ischemia, ESCs or ESC-ECs were delivered by intramuscular (IM), intra-femoral artery (IA), or intra-femoral vein (IV) injections (n=5 in each group). For 2 weeks, cell survival and localization were tracked by BLI and confirmed by gene expression, and functional improvement was assessed by laser Doppler blood perfusion. BLI results showed ESC persisting in the ischemic limb after IM or IA, but not after IV administration. Regardless of the route of administration, ESCs were detected outside of the hindlimb circulation in the spleen or lungs. ESCs did not improve limb perfusion, and induced teratomas. In contrast, ESC-ECs localized to the ischemic limb in all cases as assessed by BLI. Immunohistochemical studies confirmed the engraftment of ESC-ECs into the limb vasculature after 2 weeks. Intriguingly, ESC-ECs were not detected in the spleen or lungs after 2 weeks, even after IV administration. Furthermore, ESC-ECs improved limb perfusion. In comparison to parental ESCs, ESC-ECs preferentially localized in the ischemic hindlimb, even after IV delivery. ESC-EC localization was temporally related to the improvement in hindlimb perfusion, which was associated with engraftment of ESC-ECs into the ischemic microvasculature. This research has received full or partial funding support from the American Heart Association, Western States Affiliate (California, Nevada & Utah).