Hypovascularized diabetic nonhealing wounds are due to reduced number and impaired physiology of endogenous endothelial progenitor cell (EPC) population that limits their recruitment and mobilization at the wound site. For enrichment of the EPC repertoire from nonendothelial precursors, abundantly available mesenchymal stromal cells (MSC) were reprogrammed into induced endothelial cells (iEC). We identified cell signaling molecular targets by meta-analysis of microarray data sets. BMP-2 induction leads to the expression of inhibitory Smad 6/7–dependent negative transcriptional regulation of ID1, rendering the latter’s reduced binding to TWIST1 during transdifferentiation of Wharton jelly–derived MSC (WJ-MSC) into iEC. TWIST1, in turn, regulates endothelial gene transcription, positively of proangiogenic KDR and negatively, in part, of antiangiogenic SFRP4. Twist1 reprogramming enhanced the endothelial lineage commitment of WJ-MSC and increased the vasculogenic potential of reprogrammed endothelial cells (rEC). Transplantation of stable TWIST1 rEC into a type 1 and 2 diabetic full-thickness splinted wound healing murine model enhanced the microcirculatory blood flow and accelerated the wound tissue regeneration. An increased or decreased colocalization of GFP with KDR/SFRP4 and CD31 in the regenerated diabetic wound bed with TWIST1 overexpression or silencing (piLenti-TWIST1-shRNA-GFP), respectively, further confirmed improved neovascularization. This study depicted the reprogramming of WJ-MSC into rEC using unique transcription factor TWIST1 for an efficacious cell transplantation therapy to induce neovascularization-mediated diabetic wound tissue regeneration.