Background: The progresses made in stem cell therapy offer an innovative approach and exhibit great potential for the repair of damaged organs and tissues. This study was conducted with a view to find the mechanisms responsible for the effectiveness of bone marrow-derived mesenchymal stem cells (BM-MSCs) in the suppression of diabetes and experimentally-induced diabetic nephropathy.Methods: To realize this objective, diabetic and diabetic nephropathy subject groups that underwent MSC treatment were studied through numerous biochemistry and molecular genetics analyses.Results: The findings show that, relative to the control groups, the rats in the diabetic and diabetic nephropathy groups treated with stem cells infused with BM-MSCs showed a significant reversal in the levels of their insulin, glucose, heme-oxygenase-1 (HO-1) serum, and advanced glycation end product (AGEP). Moreover, BM-MSC therapy was also found to have a definite positive effect on the kidney functions. In addition, it also corresponded with a significant decrease in the availability of certain growth factors, namely the fibroblast growth factor (FGF), the platelet-derived growth factor (PDGF), and the transforming growth factor-β (TGF-β). BM-MSC treatment also improved the levels of expression of monocyte chemoatractant-1 (MCP-1) and interleukin-8 (IL-8) genes within kidney tissues. Lastly, the treatment recovered the organizational structure of the kidney and pancreas, a result demonstrated by a histopathological analysis. These results greatly coincide with those obtained through the biochemistry and molecular genetics analyses.Conclusion: Treatment using BM-MSCs is determined to be definitely effective in cases of diabetes and diabetic nephropathy.