The direct application of bone marrow (BM) can accelerate the healing of chronic wounds. We hypothesized that this effect is due to the presence of stromal progenitor cells (SPCs) found within whole BM preparations. To test this hypothesis, we isolated adult murine SPCs from whole BM and examined their ability to enhance impaired wound healing compared with ficoll separated BM cells in the diabetic (db/db) mouse model. SPCs significantly enhanced reepithelialization, granulation tissue formation, and neovascularization compared with control wounds treated with BM or PBS alone. Higher frequencies of donor SPC cells compared with donor BM cells were observed in treated wounds at 7 days. Transdifferentiation into GFP-positive mature endothelial cells was not observed. These observations suggest that SPCs improve wound healing through indirect mechanisms which lead to enhanced vascularization rather than through direct participation and incorporation into tissue. We conclude that topical application of BM-derived SPCs may represent an effective strategy for the treatment of chronic diabetic wounds.