The main objective was to verify the differentiation ability of adult bone marrow hematopoietic rich stem cells (HSCs) to form glucose-regulating insulin-producing cells for treatment of diabetic rats and then to study the role of it in augmenting the antioxidant defense system. Differentiation was carried out. Cells formed cell aggregates that were tested for insulin secretion in vitro and were then subjected to transplantation into the testes of diabetic rats. We evaluated effectiveness of this treatment on making changes for concentrations of glucose, insulin, and some blood antioxidants. Results: 1- Transplanted differentiated HSCs in the testes of diabetic rats induced euglycaemia. Highly significant increase in blood insulin levels was observed, concurrently with a highly significant decrease in glucose levels. All levels were remonitored and found to be within normal ranges during four weeks of follow up. 2- Highly significant improvement in levels of antioxidants (TAC, GSH, SOD and CAT) as well as oxidative stress biomarker (MDA) were observed after treatment with differentiated HSCs. 3- Following orchidectomy of the engrafted testes, the blood glucose levels showed a highly significant increase concurrently with a highly significant decrease in insulin levels in same group of animals. Differentiated cells transplanted in the testes were positively stained for insulin and c-peptide. Conclusion: Transplanted HSCs may include pancreatic progenitor cells. They were efficiently capable of treating diabetes. We report a novel evidence that differentiated HSCs transplantation can correct and reverse the imbalance between ROS and antioxidant defense by restoring and augmenting the capacity of antioxidants.