Rationale: Endothelial progenitor cells (EPCs) respond to stromal cell-derived factor 1 (SDF-1) through chemokine receptors CXCR7 and CXCR4. Whether SDF-1 receptors involves in diabetes mellitus-induced EPCs dysfunction remains unknown. Objective: To determine the role of SDF-1 receptors in diabetic EPCs dysfunction. Methods and Results: CXCR7 expression, but not CXCR4 was reduced in EPCs from db/db mice, which coincided with impaired tube formation. Knockdown of CXCR7 impaired tube formation of EPCs from normal mice, whereas upregulation of CXCR7 rescued angiogenic function of EPCs from db/db mice. In normal EPCs treated with oxidized low-density lipoprotein or high glucose also reduced CXCR7 expression, impaired tube formation, and increased oxidative stress and apoptosis. The damaging effects of oxidized low-density lipoprotein or high glucose were markedly reduced by SDF-1 pretreatment in EPCs transduced with CXCR7 lentivirus but not in EPCs transduced with control lentivirus. Most importantly, EPCs transduced with CXCR7 lentivirus were superior to EPCs transduced with control lentivirus for therapy of ischemic limbs in db/db mice. Mechanistic studies demonstrated that oxidized low-density lipoprotein or high glucose inhibited protein kinase B and glycogen synthase kinase-3β phosphorylation, nuclear export of Fyn and nuclear localization of nuclear factor (erythroid-derived 2)-like 2 (Nrf2), blunting Nrf2 downstream target genes heme oxygenase-1, NAD(P)H dehydrogenase (quinone 1) and catalase, and inducing an increase in EPC oxidative stress. This destructive cascade was blocked by SDF-1 treatment in EPCs transduced with CXCR7 lentivirus. Furthermore, inhibition of phosphatidylinositol 3-kinase/protein kinase B prevented SDF-1/CXCR7-mediated Nrf2 activation and blocked angiogenic repair. Moreover, Nrf2 knockdown almost completely abolished the protective effects of SDF-1/CXCR7 on EPC function in vitro and in vivo. Conclusions: Elevated expression of CXCR7 enhances EPC resistance to diabetes mellitus-induced oxidative damage and improves therapeutic efficacy of EPCs in treating diabetic limb ischemia. The benefits of CXCR7 are mediated predominantly by a protein kinase B/glycogen synthase kinase-3β/Fyn pathway via increased activity of Nrf2.