Recruitment of innate immune cells from the bone marrow (BM) to an injury site is required for effective repair. In diabetes, this process is altered, leading to excessive recruitment and retention of dysfunctional myeloid cells that fail to promote angiogenesis, prolong inflammation, and block healing. The aberrant myeloid phenotype is partially mediated by stable intrinsic changes to developing cells in the BM that are induced by the diabetic (db) environment, but the exact mechanisms remain largely unknown. Here, we show that the db-derived Gr-1+CD11b+ immature myeloid population has widespread misexpression of chromatin-remodeling enzymes and myeloid differentiation factors. Crucially, diabetes represses transcription of the key myeloid transcription factor CEBPA via diminished H3 Lys 27 promoter acetylation, leading to a failure in monocyte and granulocyte maturation. Restoring Cebpa expression by granulocyte colony-stimulating factor reverses the db phenotype and rescues myeloid maturation. Importantly, our data demonstrate a possible link between myeloid cell maturation and chronic inflammation.