Chronic obstructive pulmonary disease (COPD) is considered a severe disease mitigating lung physiological functions with high mortality outcomes, insufficient therapy, and pathophysiology pathways which is still not fully understood. Mesenchymal stem cells (MSCs) derived from bone marrow play an important role in improving the function of organs suffering inflammation, oxidative stress, and immune reaction. It might also play a role in regenerative medicine, but that is still questionable. Additionally, Melatonin with its known antioxidative and anti-inflammatory impact is attracting attention nowadays as a useful treatment. We hypothesized that Melatonin may augment the effect of MSCs at the level of angiogenesis in COPD. In our study, the COPD model was established using cigarette smoking and lipopolysaccharide. The COPD rats were divided into four groups: COPD group, Melatonin-treated group, MSC-treated group, and combined treated group (Melatonin–MSCs). We found that COPD was accompanied by deterioration of pulmonary function tests in response to expiratory parameter affection more than inspiratory ones. This was associated with increased Hypoxia inducible factor-1α expression and vascular endothelial growth factor level. Consequently, there was increased CD31 expression indicating increased angiogenesis with massive enlargement of airspaces and thinning of alveolar septa with decreased mean radial alveolar count, in addition to, inflammatory cell infiltration and disruption of the bronchiolar epithelial wall with loss of cilia and blood vessel wall thickening. These findings were improved significantly when Melatonin and bone marrow-derived MSCs were used as a combined treatment proving the hypothesized target that Melatonin might augment MSCs aiming at vascular changes.