Introduction: Mesenchymal stem cells (MSCs) have been introduced as a promising treatment for diabetic wounds. The effects of stem cell therapy are thought to be caused by bioactive molecules secreted by stem cells. Stem cell-based gene therapies can target bioactive molecules. Therefore, treatment using conditioned medium (CM) derived from genetically engineered stem cells has been proposed as an alternative option for diabetic ulcer care. Methods: MSCs derived from human umbilical cords were obtained and engineered to overexpress the angiogenin-1 gene (MSCs^Ang1) through plasmid transfection. This study extracted conditioned medium from MSCs (MSC-CM) or MSCs^Ang1(MSC^Ang1-CM) for wound treatment applications. Via in vitro experiments, the proangiogenic effects of MSC^Ang1-CM were assessed via the migration and tube formation of human umbilical vein endothelial cells (HUVECs). Furthermore, the efficacy of MSC^Ang1-CM in promoting wound healing, re-epithelialization, hair follicle, and angiogenesis was evaluated via a diabetic mouse skin defect model. Results: In vitro assays demonstrated that MSC^Ang1-CM significantly enhanced HUVECs’ functions, including migration and tube formation. In vivo assays revealed that MSC^Ang1-CM exhibited notable advancements in healing speed, re-epithelialization, hair follicle, and angiogenesis. Conclusion: These results indicate that MSC^Ang1-CM can promote wound healing in diabetic mice and make the vascular structure in regenerated tissues more stable without inducing tissue fibrosis, providing a new therapeutic strategy for treating diabetic skin wounds. This provides a valuable theoretical basis for further research on regenerative medicine and cell therapy.