Diabetic nephropathy (DN), a chronic kidney disease, is a major cause of end-stage kidney disease worldwide. Mesenchymal stem cells (MSCs) have become a promising option to mitigate several diabetic complications. Methods: In this study, we evaluated the therapeutic potential of bone marrow-derived mesenchymal stem cells (BM-MSCs) in a rat model of STZ-induced DN. After the confirmation of diabetes, rats were treated with BM-MSCs and sacrificed at week 12 after treatment. Results: Our results showed that STZ-induced DN rats had extensive histopathological changes, significant upregulation in mRNA expression of renal apoptotic markers, ER stress markers, inflammatory markers, fibronectin, and intermediate filament proteins, and reduction of positive immunostaining of PCNA and elevated P53 in kidney tissue compared to the control group. BM-MSC therapy significantly improved renal histopathological changes, reduced renal apoptosis, ER stress, inflammation, and intermediate filament proteins, as well as increased positive immunostaining of PCNA and reduced P53 in renal tissue compared to the STZ-induced DN group. Conclusion: In conclusion, our study indicates that BM-MSCs may have therapeutic potential for the treatment of DN and provide important insights into their potential use as a novel therapeutic approach for DN.