Emerging evidence demonstrates that proangiogenic cells (PACs) originate from the BM and are capable of being recruited to sites of ischemic injury where they contribute to neovascularization. We previously determined that among hematopoietic progenitor stem cells, common myeloid progenitors (CMPs) and granulocyte-macrophage progenitor cells (GMPs) differentiate into PACs and possess robust angiogenic activity under ischemic conditions. Herein, we report that a TGF-β1-responsive Krüppel- like factor, KLF10, is strongly expressed in PACs derived from CMPs and GMPs, ∼ 60-fold higher than in progenitors lacking PAC markers. KLF10(-/-) mice present with marked defects in PAC differentiation, function, TGF-β responsiveness, and impaired blood flow recovery after hindlimb ischemia, an effect rescued by wild-type PACs, but not KLF10(-/-) PACs. Overexpression studies revealed that KLF10 could rescue PAC formation from TGF-β1(+/-) CMPs and GMPs. Mechanistically, KLF10 targets the VEGFR2 promoter in PACs which may underlie the observed effects. These findings may be clinically relevant because KLF10 expression was also found to be significantly reduced in PACs from patients with peripheral artery disease. Collectively, these observations identify TGF-β1 signaling and KLF10 as key regulators of functional PACs derived from CMPs and GMPs and may provide a therapeutic target during cardiovascular ischemic states.