Diabetic mellitus (DM) patients are at an increased risk of developing peripheral arterial disease (PAD). Danhong injection (DHI) is a Chinese patent medicine widely used for several cardiovascular indications but the mechanism of action is not well-understood. We investigated the therapeutic potential of DHI on experimental PAD in mice with chemically induced as well as genetic (KKAy) type 2 DM and the overlapping signaling pathways regulating both therapeutic angiogenesis and glucose homeostasis. Compared with normal genetic background wild type (WT) mice, both DM mice showed impaired perfusion recovery in hind-limb ischemia (HLI) model. DHI treatment significantly accelerated perfusion recovery, lowered blood glucose and improved glucose tolerance in both DM models. Bioluminescent imaging demonstrated a continuous ischemia-induced vascular endothelial growth factor receptor 2 (VEGFR-2) gene expressions with a peak time coincident with the maximal DHI stimulation. Flow cytometry analysis showed a DHI-mediated increase in endothelial progenitor cell (EPC) mobilization from bone marrow to circulating peripheral blood. DHI administration upregulated the expression of vascular endothelial growth factor A (VEGF-A) and VEGF receptor-2 (VEGFR-2) in ischemic muscle. A cross talk between ischemia-induced angiogenesis and glucose tolerance pathways was analyzed by Ingenuity Pathway Analysis (IPA) which suggested an interaction of VEGF-A/VEGFR-2 and peroxisome proliferatoractivated receptor δ (PPARδ)/peroxisome proliferator-activated receptor γ (PPARγ) genes. We confirmed that upregulation of VEGF-A/VEGFR-2 by DHI promoted PPARδ gene expression in both type 2 diabetic mice. Our findings demonstrated that a multi-component Chinese medicine DHI effectively increased blood flow recovery after tissue ischemia in diabetic mice by promoting angiogenesis and improving glucose tolerance through a concomitant activation of VEGF-A/VEGFR-2 and PPARδ signaling pathways.