For years, researchers have painstakingly dissected this complicated disease ‘Diabetes’ caused by the destruction of insulin producing islet cells of the pancreas. Despite progress in understanding the underlying disease mechanisms for diabetes, there is still a paucity of effective therapies. Mesenchymal stem cells (MSCs) are pluripotent stromal cells that have the potential to give rise to cells of diverse lineages. Interestingly, MSCs can be found in virtually all postnatal tissues. The main criteria currently used to characterize and identify these cells are the capacity for self-renewal and differentiation into tissues of mesodermal origin, combined with a lack in expression of certain hematopoietic molecules. Because of their developmental plasticity, the notion of MSC-based therapeutic intervention has become an emerging strategy for the replacement of injured tissues. Investigators have been making slow, but steady, progress on experimental strategies for pancreatic transplantation and islet cell replacement. Now, researchers have turned their attention to adult stem cells that appear to be precursors to islet cells and embryonic stem cells that produce insulin. This review article describes the possible way to use stem cells in treatment of ‘Diabetes’.