BACKGROUND Diabetes can lead to impaired wound healing and skin grafts used surgically for diabetic wounds are often complicated with necrosis, although different therapies have been proposed. Adipose-derived stem cells (ASCs) participate in tissue repair processes and may have a role during impaired wound healing. In this study, autologous transplantation of ASCs was used to determine if it increases angiogenesis and skin graft survival and enhances wound healing in diabetic rats. METHODS Adipose-derived stem cells were successfully isolated and cultured. A full-thickness skin graft model was used to determine the effects of locally administered ASCs in 10 rats rendered diabetic (group 1), whereas 10 others served as controls (group 2). Histological examination of skin grafts followed after 1 week. Additionally, immunohistochemical staining intensity of vascular endothelial growth factor (VEGF) and transforming growth factor β3 (TGF-β3) was assessed in all grafts. RESULTS The gross and histological results showed significantly increased survival, angiogenesis, and epithelialization. Mean area of graft necrosis was significantly less in group 1 than in group 2 (7.49% vs 39.67%, P < 0.001). Statistically significant increase of capillary density, collagen intensity, VEGF, and TGF-β3 expression was noted in group 1 compared with group 2. CONCLUSIONS These findings suggest that autologous ASC transplantation can enhance skin graft survival in diabetic rats through differentiation, vasculogenesis, and secretion of growth factors such as VEGF and TGF-β3. This might represent a novel therapeutic approach in skin graft surgery for diabetic wounds.