Background Adipose-derived stem cells have been considered as a promising therapy for erectile dysfunction. However, the therapeutic efficacy of adipose-derived stem cell-based therapy requires improvement. Objective To determine whether the inhibition of phosphodiesterase type 5 in adipose-derived stem cells would improve stem cell therapy for rats with diabetes-induced erectile dysfunction. Materials and Methods A phosphodiesterase type 5 siRNA was incorporated into lentiviral vectors and transduced into adipose-derived stem cells. The mRNA and protein levels of phosphodiesterase type 5 were evaluated. Three days after transduction, the adipose-derived stem cell supernatant was collected to determinate the levels of insulin-like growth factor 1 and vascular endothelial growth factor. Streptozotocin-induced diabetic rat models were established and used for comparative analysis of 1- and 2-week treatment regimens with intracavernosal injection of adipose-derived stem cells or Lv-siPDE5-modified adipose-derived stem cells. Results Lv-siPDE5-ADSCs secreted more insulin-like growth factor 1 and vascular endothelial growth factor in supernatants than unmodified adipose-derived stem cells. Preconditioned Adipose-derived stem cells-treated diabetic rats showed consistently superior erectile function when compared with non-preconditioned adipose-derived stem cells after 2 weeks of treatment. Lv-siPDE5-ADSCs provided additional benefits in recovery of cavernous structures with rapid effects (1 week) when compared to plain adipose-derived stem cells. These features were associated with the significantly increased levels of insulin-like growth factor 1 and vascular endothelial growth factor in Lv-siPDE5-ADSC-treated diabetic rats. Conclusions Adipose-derived stem cell therapy could serve as an alternate approach for diabetes-induced erectile dysfunction, albeit with a long onset period. In vitro preconditioning of adipose-derived stem cells could accelerate the functional and structural recovery in vivo, indicating that preconditioning by inhibition of phosphodiesterase type 5 may improve adipose-derived stem cells therapy following diabetes-induced erectile dysfunction.