Diabetes mellitus is a common lifestyle disease which can be classified into type 1 diabetes mellitus and type 2 diabetes mellitus. While both result in hyperglycemia due to lack of insulin action and further associated chronic ailments, there is a marked distinction in the cause for each type due to which both require a different prophylaxis. As observed, type 1 diabetes is caused due to the autoimmune action of the body resulting in the destruction of pancreatic islet cells. On the other hand, type 2 diabetes is caused either due to insulin resistance of target cells or lack of insulin production as per physiological requirements. Attempts to cure the disease have been made by bringing drastic changes in the patients’ lifestyle; parenteral administration of insulin; prescription of drugs such as biguanides, meglitinides, and amylin; pancreatic transplantation; and immunotherapy. While these attempts cause a certain degree of relief to the patient, none of these can cure diabetes mellitus. However, a new treatment strategy led by the discovery of mesenchymal stem cells and their unique immunomodulatory and multipotent properties has inspired therapies to treat diabetes by essentially reversing the conditions causing the disease. The current review aims to enumerate the role of various mesenchymal stem cells and the different approaches to treat both types of diabetes and its associated diseases as well. © 2020, Springer Nature Switzerland AG.