Bone marrow‐derived mesenchymal stem cells (BM‐MSCs) are considered a novel regenerative therapy that holds much potential. This study aimed to examine and compare the ameliorative effects of BM‐MSCs compared to α‐tocopherol (α‐Toc) on apoptosis, autophagy, and β‐cell function in a rat model of streptozotocin (STZ)‐induced diabetes and further analyzed the implications and interrelations of the entero‐insular axis, and type I phosphoinositide 3‐kinase (PI3K)/Akt signaling. Forty adult male albino rats were categorized into four groups (n = 10, in each): control group, STZ‐induced diabetic group (single i.p. injection of STZ 45 mg/kg), diabetic and treated with BM‐MSCs injection, diabetic and treatment with α‐Toc p.o. The serum glucose, insulin, nitric oxide (NO), and catalase (CAT) were measured. Histopathological examination of the pancreas, the expression levels of insulin, CD44, caspase‐3, autophagy markers, P13K/Akt, and pancreas/duodenum homeobox protein 1, in pancreatic tissue, and glucose‐dependent insulinotropic polypeptide (GIP) in the duodenum were detected by hematoxylin and eosin staining, immunofluorescence labeling, and by quantitative real‐time polymerase chain reaction. The diabetic rats showed reduced insulin, hyperglycemia, nitrosative stress (NO, CAT), augmented apoptosis (caspase 3), impaired autophagy (p62/SQSTM1, LC3), downregulated PI3K/Akt pathway and increased GIP expression, and degeneration of pancreatic islets. Treatment with either BM‐MSCs or α‐Toc suppressed the nitrosative stress, reduced apoptosis, recovered autophagy, upregulated PI3K/Akt pathway, and subsequently increased insulin levels, decreased blood glucose, and downregulated GIP expression with partial restoration of pancreatic islets. Based on our findings, the cytoprotective effects of BM‐MSCs and α‐Toc in type 1‐induced diabetes appeared to be related to repaired autophagy and recovered PI3K/Akt signaling. Moreover, we reported their novel effects on reversing intestinal GIP expression level. The effect of BM‐MSCs was notably superior to that of α‐Toc.