The bone marrow is an invaluable source of adult pluripotent stem cells, as it gives rise to hematopoietic stem cells, endothelial progenitor cells, and mesenchymal cells, amongst others. The use of bone marrow-derived stem cell (BMSC) transplantation (BMT) may assist in achieving tissue repair and regeneration, and in modulating immune responses in the context of autoimmunity and transplantation. Ongoing clinical trials are evaluating the effects of BMSC to preserve functional beta-cell mass in subjects with type 1 and type 2 diabetes, and to favor engraftment and survival of transplanted islets. Additional trials are evaluating the impact of BMT (i.e., mesenchymal stem cells) on the progression of diabetes complications. This article reviews the progress in the field of BMSC for the treatment of subjects with insulindependent diabetes, by combining allogeneic islet transplantation with donor-specific BMSC. Clinical data is summarized from pilot studies performed at our research center over the last two decades.