Cellular secretory products have infinite potential, which is only recently explored for research and therapeutic applications. The present study elaborated on the formation of a unique matrix-entrapped cellular secretome (MCS), a hydrogel-like secretome produced by bone marrow-derived mononuclear cells when cultured on a three-dimensional electrospun nanofiber matrix under specific conditions. These culture conditions support the growth of a mixed population predominantly comprising of endothelial precursor cells (EPCs), along with mesenchymal stromal cells and pericytes. Interestingly, such secretome is not formed in a pure culture of EPCs on the similarly formulated matrix, suggesting that a heterotypic cell-cell interaction is essential for the formation of MCS. In addition, the specific composition of the matrix was found to be a critical necessity for the formation of MCS. Furthermore, the application of the MCS as a substrate promotes the growth of EPCs in culture. It also rescues the diabetes-induced EPC dysfunction as assessed based on the parameters, such as viability, proliferation, colony formation, cellular adhesion, chemotactic migration, and tubule formation. MCS augments the levels of eNOS-specific mRNA (Nos3) and also promotes the restoration of the SDF1/CXCR4 axis in diabetic EPCs. Notably, a topical application of MCS on diabetic wounds leads to an accelerated wound closure. Thus, the current data showed that MCS forms an excellent cell-free biomaterial in the treatment of diabetic wounds and non-healing ulcers.