Background: Mesenchymal stem cells (MSCs) shows significant therapeutic effects in type 1 diabetes mellitus (T1DM) as they could regulate the inflammatory processes. However, little is known about the process of MSCs immunosuppression in T1DM. In this study, we investigated the effects of wild type p53-induce phosphatase 1 (Wip1) on regulating MSCs immunosuppressive capacities in T1DM mice.Methods: Primary wild type (Wip1+/+) MSCs and Wip1 knockout (Wip1−/−) MSCs were cultured in vitro. T1DM mouse model was induced with streptozotocin and then was treated with Wip1+/+ MSCs (5 × 105) or Wip1−/− MSCs (5 × 105) by tail vein injection. The general physiological states of T1DM mice were measured every week. Moreover, the pathological changes in the pancreatic tissue were observed. Enzyme-linked immunosorbent assay (ELISA) and flow cytometry were used to detect the expressions of inflammatory cytokines in mice.Results: Wip1 −/− MSCs had lower therapeutic effects in T1DM mice. Moreover, we screened and confirmed bone marrow stromal cell antigen2 (BST2) gene that showed the target gene for Wip1 through gene chips, quantitative polymerase chain reaction and Western blot. Wip1−/− MSCs exhibited lower immunosuppressive capacity, as evidenced by enhanced expression of BST2, with concurrent increased expression of interferon-α (IFN-α). In vivo distribution analysis results indicated that Wip1−/− MSCs homed to the damaged pancreatic tissue. Wip1−/− MSCs influenced the expression of immune factors by remarkably increasing the expression of tumor necrosis factor-α (TNF-α), interleukin-17A (IL-17A), IFN-α, IFN-β, and IFN-γ and decreasing the expression of IL-4 and IL-10.Conclusions: Wip1 affects MSCs immunomodulation by regulating the expression of IFN-α/BST2. These findings suggest that Wip1 is required to regulate the therapeutic effects of MSCs on T1DM treatment, indicating a novel role of Wip1 in immunoregulation.