Previously, we showed that transient inhibition of TGF- β1 resulted in correction of key aspects of diabetes-induced CD34(+) cell dysfunction. In this report, we examine the effect of transient inhibition of plasminogen activator inhibitor-1 (PAI-1), a major gene target of TGF-β1 activation. Using gene array studies, we examined CD34(+) cells isolated from a cohort of longstanding diabetic individuals, free of microvascular complications despite suboptimal glycemic control, and found that the cells exhibited reduced transcripts of both TGF-β1 and PAI-1 compared to age, sex, and degree of glycemic control-matched diabetic individuals with microvascular complications. CD34(+) cells from diabetic subjects with microvascular complications consistently exhibited higher PAI-1 mRNA than age-matched non-diabetic controls. TGF- β1 phosphorodiamidate morpholino oligo (PMO) reduced PAI-1 mRNA in diabetic (p<0.01) and non-diabetic (p=0.05) CD34(+) cells. To reduce PAI-1 in human CD34(+) cells, we utilized PAI-1 siRNA, lentivirus expressing PAI-1 shRNA or PAI-1 PMO. We found that inhibition of PAI-1 promoted CD34(+) cell proliferation and migration in vitro, likely through increased PI3(K) activity and increased cGMP production. Using a retinal ischemia reperfusion injury model in mice, we observed that recruitment of diabetic CD34(+) cells to injured acellular retinal capillaries was greater after PAI-1-PMO treatment compared with control PMO-treated cells. Targeting PAI-1 offers a promising therapeutic strategy for restoring vascular reparative function in defective diabetic progenitors.