This study was designed to assess whether the protective effects of bone marrow-derived mesenchymal stem cells (MSCs) against diabetes could be enhanced by pioglitazone (PIO), a PPARγ agonist. Combined MSCs and PIO treatments markedly improved fasting blood glucose, body weight, lipid profile levels, insulin level, insulin resistance, β cell function. Those protective effects also attenuated both pancreatic lesions and fibrosis in diabetic rats and decreased the depletion of pancreatic mediators of glycemic and lipid metabolism including peroxisome proliferator-activated receptor alpha (PPARα), PGC-1α, GLP-1 and IRS-2. Cardiac biogenesis of diabetic groups was also improved with MSCs and/or PIO treatments as reflected by the enhanced up-regulation of the expressions of cardiac IRS1, Glucose transporter 4, PGC-1, PPARα and CPT-1 genes and the down-regulated expression of lipogenic gene SREBP. The combination of MSCs and PIO also potentiated the decrease of abnormal myocardial pathological lesions in diabetic rats. Similarly, the inhibitory effects of MSCs on diabetic cardiac fibrosis and on the up regulations of TGF-β, collagen I and III gene expressions were partial but additive when combined with PIO. Therefore, combined therapy with PIO and BMCs transplantation could further potentiate the protective benefit of MSCs against diabetes and cardiac damage compared to MSCs monotherapy.