Niacin can reduce vascular disease risk in individuals with metabolic syndrome, but in light of recent large randomized controlled trials outcomes, its biological actions and clinical utility remain controversial. Niacin can improve endothelial function, vascular inflammation, and vascular regeneration, independent of correcting dyslipidemia, in various lean rodent models of vascular injury. Here, we tested whether niacin could directly improve endothelial cell angiogenic function during combined exposure to excess fatty acids and hypoxia, and whether intervention with niacin during continued feeding of western diet could improve revascularization and functional recovery in obese, hyperlipidemic mice with peripheral ischemia. Treatment with niacin (10 μmol/L) increased human microvascular endothelial cell angiogenic function during exposure to high fatty acids and hypoxia (2% oxygen), as determined by tube formation on Matrigel. To assess revascularization in vivo, we used western diet‐induced obese mice with unilateral hind limb femoral artery ligation and excision. Treatment for 14 days postinjury with once daily i.p. injections of a low dose of niacin (50 mg/kg) improved recovery of hind limb use, in association with enhanced revascularization and decreased inflammation of the tibialis anterior muscle. These effects were concomitant with decreased plasma triglycerides, but not increased plasma apoAI. Thus, niacin improves endothelial tube formation under lipotoxic and hypoxic conditions, and moreover, promotes revascularization and functional hind limb recovery following ischemic injury in diet‐induced obese mice with hyperlipidemia. These data may have implications for niacin therapy in the treatment of peripheral ischemic vascular disease associated with metabolic syndrome.