Introduction. Healing of tendon injuries is often plagued by significant scar formation and compromised biomechanical function. For those with diabetes, these injuries are further complicated by alterations to the extracellular matrix of the tendon, poor circulation, and delayed wound healing; consequently, complications and re-rupture rates for patients with diabetes are reported higher than the typical patient population. Placental derived membranes, specifically dehydrated human amnion/chorion membranes (dACMs), have been utilized clinically as an adhesion barrier, and these membranes have been shown to reduce scarring and aid in tissue repair. Objective. The purpose of this study was to evaluate the effect of dACMs on tendon repair in a diabetic model with impaired healing. Materials and Methods. Using a type II diabetic model (BBZDR/WOR rats), a full-thickness injury was made through the Achilles tendon and repaired using a modified Kessler method. Repaired tendons were wrapped with dACM or left unwrapped as a control (n = 15/group; n = 30 total). Tendons were retrieved at 14 (n = 5/group; n = 10 total) or 28 days (n = 10/group; n = 20 total) and evaluated using histology, immunofluorescence, and biomechanical testing. Results. Treatment of tendons with dACM resulted in reduced failure rates, increased cell migration, and improved mechanical properties (compared with unwrapped controls). The dACM-treated tendons also showed changes in the production of several important biomarkers to tendon healing at both 14 and 28 days; most notably, Scleraxis was found to be upregulated in dACM-treated tendons. Conclusions. This study highlights a promising treatment option for this challenging clinical population.