Biomaterials may improve outcomes of endothelial progenitor-based therapies for the treatment of ischemic cardiovascular disease, due to their ability to direct cell behavior. We hypothesized that local, sustained delivery of exogenous vascular endothelial growth factor (VEGF) and stromal cell-derived factor (SDF) from alginate hydrogels could increase recruitment of systemically infused endothelial progenitors to ischemic tissue, and subsequent neovascularization. VEGF and SDF were found to enhance in vitro adhesion and migration of outgrowth endothelial cells (OECs) and circulating angiogenic cells (CACs), two populations of endothelial progenitors, by twofold to sixfold, and nearly doubled recruitment to both ischemic and nonischemic muscle tissue in vivo. Local delivery of VEGF and SDF to ischemic hind-limbs in combination with systemic CAC delivery significantly improved functional perfusion recovery over OEC delivery, or either treatment alone. Compared with OECs, CACs were more responsive to VEGF and SDF treatment, promoted in vitro endothelial sprout formation in a paracrine manner more potently, and demonstrated greater influence on infiltrating inflammatory cells in vivo. These studies demonstrate that accumulation of infused endothelial progenitors can be enriched using biomaterial-based delivery of VEGF and SDF, and emphasize the therapeutic benefit of using CACs for the treatment of ischemia.