Aim The aim of the current study was to evaluate the therapeutic and regenerative effects of MSCs derived exosomes in the treatment of type 1 DM and to compare its effects with MSCs themselves. The experiment was done on forty albino rats grouped as follows, group (1): Ten healthy rats, group (2): Ten induced type 1 DM rats, group (3): Ten induced type 1 DM rats received exosomes intraperitoneally, and group (4): Ten induced type 1 DM rats received MSCs intraperitoneally. Serum glucose and plasma insulin levels were assessed weekly. QRT-PCR was done to assess regeneration of pancreatic beta cells by measuring insulin, Pdx1, Smad2, Smad3 and TGF beta genes. Additionally, histopathological and immune-histochemical examinations were done to confirm pancreatic tissue regeneration. Results Regarding the assessed genes (insulin, Pdx1, Smad2, Smad3 and Tgf beta) gene expression in MSCs treated group showed significant increase compared to diabetic group (p value < 0.001) and gene expression in exosomes treated group was increased significantly compared to diabetic and MSCs treated groups (p value < 0.001). Histopathological and immune-histochemical examination revealed regeneration of pancreatic islets in both treated groups. Conclusion MSCs Derived exosomes showed superior therapeutic and regenerative results than MSCs themselves