Photobiomodulation (PBMT) speeds up wound healing, partly by attracting pericytes. However, its specific mechanisms in a diabetic setting are still not well understood. We studied tissue regeneration after PBMT using a transgenic mouse model (NG2+DsRed/Nestin+GFP) with streptozotocin-induced Type 1 diabetes. PBMT was applied daily (660 nm, 20 mW, 7 s, 0.14 J, 0.71 W/cm2, 5 J/cm2). Our results showed increased lumen area of pericyte-covered vessels and significant flow of perivascular and neural progenitor cells in PBMT-treated wounds. We also saw an increase in the pro-resolving cytokine IL-1RA after irradiation. PBMT did not change levels of GLUT1, TNF, IL-1α, or NF-κB in the chronic inflammatory environment. Diabetic cells treated with PBMT showed limited proliferation and migration but had improved ability for adipogenic differentiation. Despite only modest changes in the inflammatory microenvironment, photobiomodulation notably accelerates tissue repair by directly encouraging pericyte and neural progenitors entry into the wound bed.