Adipose-derived stem cells (ADSCs) have myocardial regeneration potential, and transplantation of these cells following myocardial infarction (MI) in animal models leads to modest improvements in cardiac function. We hypothesized that pharmacological priming of pre-transplanted ADSCs would further improve left ventricular functional recovery after MI. We previously identified a compound from a family of 3,5-disubstituted isoxazoles, ISX1, capable of activating an Nkx2-5-driven promoter construct. Here, using ADSCs, we found that ISX1 (20 mM, 4 days) triggered a robust, dose-dependent, fourfold increase in Nkx2-5 expression, an early marker of cardiac myocyte differentiation and increased ADSC viability in vitro. Co-culturing neonatal cardiomyocytes with ISX1-treated ADSCs increased early and late cardiac gene expression. Whereas ISX1 promoted ADSC differentiation toward a cardiogenic lineage, it did not elicit their complete differentiation or their differentiation into mature adipocytes, osteoblasts, or chondrocytes, suggesting that re-programming is cardiomyocyte specific. Cardiac transplantation of ADSCs improved left ventricular functional recovery following MI, a response which was significantly augmented by transplantation of ISX1- pretreated cells. Moreover, ISX1-treated and transplanted ADSCs engrafted and were detectable in the myocardium 3 weeks following MI, albeit at relatively small numbers. ISX1 treatment increased histone acetyltransferase (HAT) activity in ADSCs, which was associated with histone 3 and histone 4 acetylation. Finally, hearts transplanted with ISX1-treated ADSCs manifested significant increases in neovascularization, which may account for the improved cardiac function. These findings suggest that a strategy of drug-facilitated initiation of myocyte differentiation enhances exogenously transplanted ADSC persistence in vivo, and consequent tissue neovascularization, to improve cardiac function.