Diabetes mellitus remains a significant public health problem, consuming over $400 billion every year. While Diabetes itself can be controlled effectively, impaired wound healing still occurs frequently in diabetic patients. Adipose-derived mesenchymal stem cells (ASCs) provide an especially appealing source for diabetic wound cell therapy. With autologous approaches, the functionality of ASCs largely underlie patient-dependent factors. Diabetes is a significant diminishing factor of MSC functionality. Here, we explore a novel strategy to enhance diabetic ASC functionality through deferoxamine (DFO) preconditioning.Human diabetic ASCs have been preconditioned with 150 µM and 300 µM DFO in vitro and analyzed for regenerative cytokine expression. Murine diabetic ASCs have been preconditioned with 150 µM DFO examined for their in vitro and in vivo vasculogenic capacity in Matrigel assays. Additionally, a diabetic murine wound healing model has been performed to assess the regenerative capacity of preconditioned cells.DFO preconditioning enhances the VEGF expression of human diabetic ASCs through hypoxia-inducible factor upregulation. The use of 150 µM of DFO was an optimal concentration to induce regenerative effects. The vasculogenic potential of preconditioned diabetic ASCs is significantly greater in vitro and in vivo. The enhanced regenerative functionality of DFO preconditioned ASCs was further confirmed in a model of diabetic murine wound healing.These results demonstrate that DFO significantly induced the upregulation of hypoxia-inducible factor-1 alpha and VEGF in diabetic ASCs and showed efficacy in the treatment of diabetes-associated deficits of wound healing. The favorable status of DFO as a small molecule drug approved since decades for multiple indications makes this approach highly translatable.