The MSCs of various origins are known to ameliorate or modulate cell survival strategies. We investigated, whether UCB MSCs could improve the survival of the human neuronal cells and/or fibroblast assaulted with DPN sera. The results showed, the co‐culture of UCB MSCs with human neuronal cells and/or fibroblasts could effectively scavenge the pro‐inflammatory cytokines TNF‐α, IL‐1β, IFN‐ɤ and IL − 12 and control the pro‐apoptotic expression of p53/Bax. Further co‐culture of UCB MSCs have shown to induce anti‐inflammatory cytokines like IL‐4, IL‐10 and TGF‐β and anti‐apoptotic Bclxl/Bcl2 expression in the DPN sera stressed cells. Amelioration of elevated [Ca2+]i and cROS, the portent behind the NFκB/Caspase‐3 mediated inflammation in DPN rescued the cells from apoptosis. The results of systemic administration of BM MSCs improved DPN pathology in rat as extrapolated from human cell model. The BM MSCs ameliorated prolonged distal motor latency (control: 0.70 ± 0.06, DPN: 1.29 ± 0.13 m/s DPN + BM MSCs: 0.89 ± 0.02 m/s, p < 0.05) and lowered high amplitude of compound muscle action potentials (CMAPs) (control: 12.36 ± 0.41, DPN: 7.52 ± 0.61 mV, DPN + MSCs: 8.79 ± 0.53 mV, p < 0.05), while slowly restoring the plasma glucose levels. Together, all these results showed that administration of BM or UCB MSCs improved the DPN via ameliorating pro‐inflammatory cytokine signaling and [Ca2+]i homeostasis. Mesenchymal stem cells ameliorate diabetic peripheral neuropathy through modulating the intracellular milieu of calcium/ROS mediated downstream apoptotic neuronal cell death.