Mesenchymal stem cells (MSCs) are the most widely used stem cells of the human body due to ease of successful isolation and expansion for many years. In particular, from 2012 until now, MSCs have been widely clinically used to treat various diseases, including graft versus host disease (GVHD), Crohn’s disease, and knee osteoarthritis. In this review, the applications of MSCs in diabetes will be reviewed and discussed. Diabetes mellitus type 1, also known as Type 1 diabetes (T1DM), is an autoimmune disease in which immune cells attack the beta cells in islets of Langerhans (pancreatic islets). Although type 2 diabetes (T2DM) is considered to be a disease related to insulin resistance, several recent studies have shown some relation of immune dysfunction in this disease. Therefore, MSC transplantation may be a beneficial treatment for both T1DM and T2DM. MSC transplantation in preclinical trials and clinical trials for T1DM and T2DM have shown a moderate to significant improvement in diabetes without adverse side effects. In this review, we will discuss some of the updates from preclinical and clinical trials of MSC transplantation for diabetes.