Stem cell therapy for patients with diabetes is an area of great interest to both scientists and clinicians. Human umbilical cord blood cells (HUCBCs) are being increasingly used as a source of stem cells for cell-based therapy for diabetes because these cells can differentiate into pancreatic islet β-cells. Administration of HUCBCs has been shown to lower blood glucose levels in diabetic animal models. The use of autologous HUCBC transfusion in type 1 diabetic children has not shown any benefit. However, “Stem Cell Educator” therapy has shown promise in long term lowering of blood glucose levels in both type 1 and type 2 diabetic patients. In this review, we will briefly discuss recent advances in HUCBC therapy in the treatment of diabetes and some of its complications.