Therapeutic angiogenesis with mesenchymal stem cells (MSCs) is promising for the clinical treatment of peripheral artery disease (PAD). However, the heterogeneous proangiogenic nature of MSCs is a key challenge in developing more effective treatments with MSCs for therapeutic angiogenesis purposes. Here, we propose to enhance the therapeutic function of human placenta-derived MSCs (hP-MSCs) in hindlimb ischemia therapy by using nitric oxide (NO)-releasing chitosan hydrogel (CS-NO). Our data showed that the co-transplantation of CS-NO hydrogel with hP-MSCs remarkably improved the grafting of hP-MSCs and ameliorated the functional recovery of ischemic hindlimbs. Moreover, we found that the neovascularization of damaged hindlimbs was significantly increased after co-transplanting CS-NO hydrogel and hP-MSCs, as confirmed by bioluminescence imaging (BLI). Further analysis revealed an endothelial-like status transformation of hP-MSCs in the presence of NO, which was identified as a potential mechanism contributing to the enhanced endothelium-protective and proangiogenic capacities of hP-MSCs that promote angiogenesis in mouse models of hindlimb ischemia. In conclusion, this study provides a promising approach for using NO hydrogel to improve the proangiogenic potency of MSCs in ischemic diseases, and the strategy used here facilitates the development of controlled-release scaffolds for enhancing the therapeutic efficiency of MSCs in angiogenic therapy.Copyright © 2020. Published by Elsevier Ltd.