Diabetic foot (DF) is a common complication of high severity for diabetes, a prevalent metabolic disorder that affects billions of people worldwide. Mesenchymal stem cells (MSCs) have a demonstrative therapeutic effect on DF, through their generation of pro-angiogenesis factors, like vascular endothelial growth factor (VEGF). Recently, genetically modified MSCs have been used in therapy and we have shown that depletion of micoRNA-205-5p (miR-205-5p) in human MSCs promotes VEGF-mediated therapeutic effects on DF. Here, we showed that a long non-coding RNA (lncRNA), MALAT1, is a competing endogenous RNA (ceRNA) for miR-205-5p, and is low expressed in human MSCs. Ectopic expression of MALAT1 in human MSCs significantly decreased miR-205-5p levels, resulting in upregulation of VEGF production and improved in vitro endothelial cell tube formation. In a DF model in immunodeficient NOD/SCID mice, transplantation of human miR-205-5p-depleted MSCs exhibited better therapeutic effects on DF recovery than control MSCs. Moreover, MALAT1-expressing MSCs showed even better therapeutic effects on DF recovery than miR-205-5p-depleted MSCs. This difference in DF recovery was shown to be associated with the levels of on-site vascularization. Together, our data suggest that MALAT1 functions as a sponge RNA for miR-205-5p to increase therapeutic effects of MSCs on DF.