Abstract Therapeutic utility of bone marrow transplantation in diabetic patients to overcome deficient β-cell population is an attractive proposal. However, the status of bone marrow stem cells (BMSCs) under hyperglycemia is not known. In the present study, we investigated the status of BMSCs in experimental-diabetic mice and demonstrated the rescue of experimental diabetes by multiple diabetic bone marrow transplantation. Our flow-cytometry analysis for CD34 +, CD45 +, flk1 +, c-kit +, and CD34 +CD45 + revealed that BMSC reserve remains unaffected under sustained hyperglycemia. We found that single injection of diabetic bone marrow cells (∼10 6) resulted in reduction and stabilization of moderate hyperglycemia. However, multiple injections at regular intervals led to restoration of stabilized normoglycemia during a 30 day follow-up. Reversal of diabetes was evidenced by disappearance of hyperglycemia, normal intra-peritoneal glucose tolerance test, and histology and morphometry of pancreas. The present study thus demonstrates that diabetic bone marrow retains its stemness and potential to induce pancreatic regeneration on transplantation.