Transplantation of bone marrow-derived mesenchymal stem cells (BMSCs) is a potential therapy for cerebral ischemia. Although BMSCs-induced angiogenesis is considered important for neurological functional recovery, the neurorestorative mechanisms are not fully understood. We examined whether BMSCs-induced angiogenesis enhances cerebral tissue perfusion and creates a suitable microenvironment within the ischemic brain, which in turn accelerates endogenous neurogenesis and leads to improved functional recovery. Adult female rats subjected to 2 h middle cerebral artery occlusion (MCAO) were transplanted with a subpopulation of human BMSCs from male donors (Flk-1+ hBMSCs) or saline into the ipsilateral brain parenchymal at 3 days after MCAO. Flk-1+ hBMSCs-treated rats exhibited significant behavioral recovery, beginning at 2 weeks after cerebral ischemia compared with controls. Moreover, rats treated with Flk-1+ hBMSCs showed increased glucose metabolic activity and reduced infarct volume. Flk-1+ hBMSCs treatment significantly increased the expression of vascular endothelial growth factor and brain-derived neurotrophic factor, promoted angiogenesis, and facilitated cerebral blood flow in the ischemic boundary zone. Further, Flk-1+ hBMSCs treatment enhanced proliferation of neural stem/progenitor cells (NSPCs) in the subventricular zone and subgranular zone of the hippocampus. Finally, more NSPCs migrated toward the ischemic lesion and differentiated to mature neurons or glial cells with less apoptosis in Flk-1+ hBMSCs-treated rats. These data indicate that angiogenesis induced by Flk-1+ hBMSCs promotes endogenous neurogenesis, which may cause functional recovery after cerebral ischemia.