<p>Diabetes mellitus, encompassing both T1DM and T2DM, represents a global health challenge. While traditional therapies focus on managing symptoms, emerging stem cell therapies, particularly MSCs, offer potential curative approaches. This review explores advancements in diabetes research with an emphasis on mesenchymal stem cells (MSCs). Additionally, we discuss clinical trials and applications of MSCs in diabetes treatment, providing a comprehensive analysis of this promising therapeutic frontier. MSCs have been shown to provide immunomodulatory effects, delay disease progression and reverse insulin resistance in preclinical and clinical studies. MSC-derived EVs have been extensively studied as well, exhibiting similar therapeutic benefits while also possibly having lower immunogenicity than MSCs. Phase I and II clinical studies have demonstrated MSCs to be effective in juvenile T1DM and able to significantly reduce HbA1c, fasting blood glucose, insulin demand and plasma blood glucose levels (<i>p</i> &lt; 0.05). There is however a lack of standardisation of protocols across studies, highlighting the need for comparative studies to establish the optimal dosing, treatment schedule, administration route and source of MSCs. Large-scale randomised controlled trials are necessary to establish safety and efficacy in human patients, paving the way for MSC-based therapies in diabetes treatment.</p><p> <?noindent??><b>Clinical trial number</b>: Not applicable.</p>