Diabetes is a major risk factor for ischemic disease. Treatment options for diabetic patients with peripheral arterial disease when revascularization is not possible are limited, resulting in a high incidence of limb amputation. We evaluated the therapeutic potential of AdCA5, an adenovirus encoding a constitutively active form of HIF-1alpha, in a diabetic model of critical limb ischemia. Diabetic db/db and nondiabetic db/+ mice were subjected to unilateral femoral artery ligation. Limb perfusion, tissue viability, and motor function were more severely impaired in db/db mice. Intramuscular injection of AdCA5 into the ischemic limb of db/db mice increased the recovery of limb perfusion and function, reduced tissue necrosis, rescued the diabetes-associated impairment of circulating angiogenic cells, enhanced endothelial nitric oxide synthase activation, and increased vessel density and luminal area in the ischemic limb.