Angiotensin-converting enzyme 2 (ACE2) is a lately discovered enzyme catalyzing Angiotensin II into Angiotensin 1-7. Angiotensin II has been reported to impair endothelial progenitor cell (EPC) function and is detrimental to stroke. Here, we studied the role of ACE2 in regulating EPC function in vitro and in vivo. EPCs were cultured from human renin and angiotensinogen transgenic (R+A+) mice and their controls (R-A-). In in vitro experiments, EPCs were transduced with lentivirus-ACE2 or lentivirus-green fluorescence protein. The effects of ACE2 overexpression on EPC function and endothelial NO synthase (eNOS)/nicotinamide adenine dinucleotide phosphate oxidase (Nox) expression were determined. ACE2, eNOS, and Nox inhibitors were used for pathway validation. In in vivo studies, the therapeutic efficacy of EPCs overexpressing ACE2 was determined at day 7 after ischemic stroke induced by middle cerebral artery occlusion. We found that (1) lentivirus-ACE2 transduction resulted in a 4-fold increase of ACE2 expression in EPCs. This was accompanied with an increase in eNOS expression and NO production, and a decrease in Nox2 and -4 expression and reactive oxygen species production. (2) ACE2 overexpression improved the abilities of EPC migration and tube formation, which were impaired in R+A+ mice. These effects were inhibited by ACE2 or eNOS inhibitor and further enhanced by Nox inhibitor. (3) Transfusion of lentivirus-ACE2-primed EPCs reduced cerebral infarct volume and neurological deficits, and increased cerebral microvascular density and angiogenesis. Our data demonstrate that ACE2 improves EPC function, via regulating eNOS and Nox pathways, and enhances the efficacy of EPC-based therapy for ischemic stroke.