Diabetic wounds remain a significant source of morbidity and healthcare burden worldwide. Despite advances in standard wound care which include debridement, infection control, off-loading, revascularization, and adjunctive therapies, healing rates remain suboptimal, and the risk of severe complications such as infection, amputation, and mortality remains high. In light of the pathologic inflammatory response and impaired healing observed in diabetic wounds, stem cells, particularly those capable of suppressing pro-inflammatory cytokine production, expanding regulatory T cells, and supporting angiogenesis, have gained significant attention. Stem cell-based therapies, possibly in combination with smart biomaterials and cell-free approaches, hold the potential to transform the management of chronic diabetic wounds, bridging the gap between scientific innovation and clinical application. This chapter explores the most recent advances in stem cell-based therapies for diabetic wound healing, examining underlying mechanisms, delivery strategies, and current clinical evidence supporting their use.