Delivering syndecan-4 with FGF-2 improves the effectiveness of FGF-2 therapy for ischemia in the diabetic disease state. The syndecan-4 proteoliposomes significantly enhance in vitro tubule formation as well as blood perfusion and vessel density in the ischemic hind limbs of diseased ob/ob mice. Syndecan-4 therapy also induces a marked immunomodulation in the tissues, increasing the polarization of macrophages toward the M2 phenotype.