Background: Diabetes mellitus is one of the main causes of death due to the complications that involve many organs such as heart, kidney, retina and others. Mesenchymal stem cell (MSC) has been demonstrated to be effective in treatment of diabetes. Aim of the work: To evaluate the effect of stem cells in the treatment of diabetic cardiomyopathy clarifying their role in oxidative stress and inflammation. Material and methods: 30 adult male albino rats were equally divided into 3 groups: control group (group I): received 1ml saline by intra-peritoneal (IP) injection. Streptozotocin-treated group (group II): received Streptozotocin (STZ) (60mg/kg BW, I.P.) for induction of diabetes then were sacrificed after 4 weeks. Steptozotocin+ Stem cell-treated group (group III): received STZ for induction of diabetes and they were left for 4 weeks then they were injected once intravenously with 1 million units of MSC then were sacrificed after 4 weeks. The heart sections were examined Histologically with H&E and Masson's Trichrome Stain and Immunohistochemically for endothelial Nitric Oxide Synthase (eNOS). A morphometric study and statistical analysis were performed. Results: DM caused inflammation, degeneration, fibrosis and decreased eNOS Immunoexpression of the cardiac muscle fibers. The administration of MSCs improved pathological changes and increased eNOS Immunoexpression in the heart. Conclusion: MSCs administration proved to have effective therapeutic role in treating diabetic cardiomyopathy