Diabetes mellitus (DM) is a worldwide growing disease and represents a huge social and healthcare problem owing to the burden of its complications. Micro- and macrovascular diabetic complications arise from excess damage through well-known biochemical pathways. Interestingly, microangiopathy hits the bone marrow (BM) microenvironment with features similar to retinopathy, nephropathy and neuropathy. The BM represents a reservoir of progenitor cells for multiple lineages, not limited to the hematopoietic system and including endothelial cells, smooth muscle cells, cardiomyocytes, and osteogenic cells. All these multiple progenitor cell lineages are profoundly altered in the setting of diabetes in humans and animal models. Reduction of endothelial progenitor cells (EPCs) along with excess smooth muscle progenitor (SMP) and osteoprogenitor cells creates an imbalance that promote the development of micro- and macroangiopathy. Finally, an excess generation of BM-derived fusogenic cells has been found to contribute to diabetic complications in animal models. Taken together, a growing amount of literature attributes to circulating progenitor cells a multi-faceted role in the pathophysiology of DM, setting a novel scenario that puts BM and the blood at the centre of the stage.