Cilostazol is effective for the treatment of peripheral ischemia. This compound has several beneficial effects on platelet aggregation, serum lipids and endothelial cells, and we recently found that it enhances collateral blood flow in the ischemic hind limbs of mice. Peroxisome proliferator-activated receptor (PPAR)γ, a receptor for thiazolidinediones, plays a role in angiogenesis. The aim of this work was to investigate the underlying molecular mechanisms and effects of cilostazol in a model of peripheral ischemia in diabetic mice. We induced diabetes in mice by streptozotocin (STZ) administration and studied ischemia-induced angiogenesis in the ischemic hind limbs of cilostazol-treated and untreated control mice. We found that perfusion recovery was significantly improved in treated compared with control diabetic mice. Interestingly, we found that the expression of PPARγ is reduced in ischemic tissues of diabetic mice. Furthermore, we discovered that local inhibition of the activity of this nuclear receptor decreased the angiogenic response to cilostazol treatment. Finally, we noted that this phenomenon is dependent on VEGF and modulated by PPARγ. Cilostazol administration enhances collateral blood flow in the ischemic hind limbs of STZ-induced diabetic mice through a PPARγ-dependent mechanism.